US 10-year yield jumps by most since June
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- The US bond yields jumped on Tuesday, pushing gold lower.
- While the 10-year nominal yield ticked higher, the real yield remained near record lows.
The yield on the US 10-year Treasury note jumped by most in more than two months on Tuesday, as positive vaccine news boosted risk sentiment, weakening demand for haven assets like bonds and golds.
In addition, investors look to have sold bonds in anticipation of a surge in debt issuance by the US government and American companies. The US fiscal deficit more than tripled because of coronavirus rescue spending in the first 10 months of the fiscal year 2020 and looks set to rise further, as the US Congress is negotiating an additional federal aid package.
The benchmark yield rose over six basis points or 10% to 0.66%, the highest level since July 13. The daily gain was the highest since June 4.
The uptick in yields weighed over gold, a zero-yielding safe haven. The yellow metal declined by over 5.7%, registering its biggest single-day decline in seven years.
While the nominal yield jumped, the real or inflation-adjusted yield remained at record lows near -1%. As such, it is too early to call a bearish reversal in gold.
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