- Gold futures rose by as much as $23 on Wednesday, erasing much of last week’s sharp slide.
- U.S. government bond yields pare back from three-month highs.
- Bullion is more attractive to investors following last week’s brutal skid.
The price of gold rallied on Wednesday, as declining bond yields and waning appetite for risk propped up the precious commodity after a volatile two-week skid.
December gold deliveries, the most actively traded futures contract, surged by as much as $23 on Wednesday, reaching a session high of $1,467.60 a troy ounce on the Comex division of the New York Mercantile Exchange. The yellow metal was last seen hovering just below $1,465 a troy ounce, having gained $11.10, or 0.8%.
Gold for December settlement is recovering on Wednesday but remains well off yearly highs. | Chart: barchart.com
A combination of technical trading and declining bond yields largely underpinned gold’s impressive recovery on Wednesday.
Fresh off its worst weekly slide in three years, gold’s price has appeared more attractive to bottom pickers. The selloff was partially driven by chart-based sellers who turned bearish on the commodity.
The precious metal managed to defend $1,450 – the immediate price floor – after briefly trading below that level last week. Even with the latest recovery, gold is significantly undervalued relative to its yearly high of around $1,570.
Despite the recent wave of volatility, gold continues to be rangebound. As FX Empire notes, the commodity continues to target a primary trading range between $1,412.10 and $1,566.20. Retracement is located between $1,471 and $1,489.20.
Bond Yields Decline
When gold suffered its worst weekly drop in three years, U.S.