Breaking: Gold drops below $1,900, taking weekly loss to 7.4%
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Gold has fallen below $1,900 for the first time since July 24. The yellow metal is currently trading near $1,880, representing a 1.6% decline on the day.
Prices fell by 5.72% on Tuesday to register the biggest single-day decline in seven years as the US 10-year yield jumped by over six basis points. The zero-yielding metal usually faces selling pressure when yields rise.
However, while the nominal yield rose on Tuesday, the real or inflation-adjusted yield remained near the recently reached record low of -1%. Besides, the Federal Reserve and other major central banks are unlikely to halt the massive liquidity-boosting stimulus programs launched early this year. As such, real yields are likely to remain low, keeping the yellow metal, a hedge against inflation, better bid.
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