Gold Prices Drop as Yields Rise and China Data Disappoints.

Gold and silver prices fell as US yields surged following Bank of Canada's decision to resume its tightening campaign. Non-yielding precious metals tend to perform poorly when higher nominal rates boost returns on competing assets, such as government bonds. The resumption of tightening by the Bank of Canada was a wake-up call for markets, and if the Fed mistakenly employs a similar strategy, it could start hiking again in July and do so in a more aggressive manner. Gold's recent decline seems to be a corrective move within a medium-term uptrend, but the bias could turn bearish very quickly if prices breach the rising trendline that has been guiding the market higher since November of 2022.