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Trackinsight: Steady rates and dollar retreat boost gold ETFs

November 08, 2021 at 10:15 am EST

The rally has been fueled by the retreat in global bond yields, with the benchmark U.S. 10-year yield dropping below the 1.5% mark for the first time in over a month.

Gold prices remains strong, trading above $1,810 after gaining more than 1.5% this month. The rally has been fueled by the retreat in global bond yields, with the benchmark U.S. 10-year yield dropping below the 1.5% mark for the first time in over a month, after the Federal Reserve held back specific discussions on the extent of next year?s tapering and the timing of interest rate hikes.

In Europe, the President of the European Central Bank, Christine Lagarde, said last Wednesday thatit was ?very unlikely? that she would raise rates next year, which sent European bond yields lower. British Bond yields fell as well after the Bank of England followed a similar stance, keeping rates steady.

The US dollar retreat supported the Gold rush, as a softer greenback lifts bullion's appeal by decreasing its cost to buyers holding other currencies. In the funds' space, Gold ETFs tagged along with SPDR Gold Shares (GLD), iShares Gold Trust (IGT) and Xetra-Gold ETC (4GLD) gaining close to 2.0% last week. Same for Gold Miners ETFs with VanEck Vectors Gold Miners ETF, VanEck Vectors Junior Gold Miners ETF (GDXJ) and iShares MSCI Global Gold Miners ETF (RING) inching 3.2%, 3.4% and 3.64% respectively during the same period.

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