Barclays: Rising U.S. Dollar, Treasury Yields ‘Headwinds For Gold’

London (Sept 13)  Barclays looks for further declines in gold due to “headwinds” from a rising U.S. dollar and Treasury yields. The metal dipped below $1,230 an ounce Friday for the first time since early January. “The macro backdrop looks set to become increasingly negative for gold, particularly in light of the strength of the dollar and U.S. 10y (10-year) Treasuries rising to six-week highs,” Barclays says. “Although both relationships are headwinds for gold, we expect the correlation with the EUR/USD to strengthen as geopolitical tensions ease. Our FX strategists’ recent downgrade of EUR/USD poses increasing downside risks that, in our view, will trump any modest seasonal improvement in physical demand.” The yield on 10-year U.S. Treasury notes climbed as high as 2.607% Friday, its strongest level since July 31.

Source: KitcoNews