Gold eyes first weekly loss since early June

• Gold is down 4% on a week-to-date basis at press time. 
• The metal last suffered a weekly loss in early June. 
• Recovery in US yields looks to have pushed gold lower.

Gold appears on track to end its nine-week winning run. 

At press time, the yellow metal is trading near $1,950 per ounce, representing a 4% decline on a week-to-date basis. Prices reached a record high of $2,075 last week. 

The latest week loss, which is the biggest since March, could be attributed to the bounce in the US treasury yields. 

The yield on the US 10-year treasury note rose to a high of 0.727% on Thursday, a level last seen on June 24. The yield has added 18 basis points this week, having bottomed out at 0.504% in the previous week. Gold being a zero-yielding safe haven, tends to lose its shine when bond yields rise. 

That said, the uptick in the nominal yields may not be the reason for gold’s poor performance this week. The metal looked extremely overbought following a rally to record highs above $2,070. That may have caused some buyers to take profit, leading to a price pullback. 

The overall outlook, however, remains bullish, as real or inflation-adjusted bond yields are likely to remain negative for a long time with the Federal Reserve and other major central banks running ultra-accommodative monetary policies. Also, the US dollar, gold’s biggest nemesis, is likely to remain under pressure due to ballooning twin deficits. 

Technical levels