Gold Price News and Forecast: XAU/USD mildly bid in Asia as US treasury yields soften

FXStreet Team FXStreet

Gold's options market retains bullish bias despite sell-off in spot market

Gold fell by over 4.5% on Monday and could suffer deeper declines in the next few weeks as the US fiscal imprudence and hopes for coronavirus vaccine are likely to power treasury yields higher.

Even so, the options market retains the bullish bias with call options claiming a higher premium than puts, as indicated by the positive one-month risk reversals. The gauge of calls to puts is currently trading at 0.25, according to data source Reuters.

Gold mildly bid in Asia as US treasury yields soften

Gold, a zero-yielding safe-haven metal, is trading in the green, with the US bond yields pulling back from multi-month highs. At press time, the metal is changing hands near $1,870, representing a 0.22% gain on the day. The 10-year Treasury yield is hovering near 0.942%, down four basis points from the 4.5-month high of 0.98% reached Wednesday. However, the relief could be short-lived, as the US fiscal largesse could continue to power gains in yields and weigh over gold.

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