Gold dropped below $1700 for the first time since July 21

Gold prices accelerated their decline on Thursday amid the strengthening of the US dollar and rising yields on US government bonds. The current value of the precious metal is $1699.25. Thus, the asset fell below $1700 per troy ounce for the first time since July 21.

Last Friday, the head of the US Federal Reserve System Jerome Powell said that the US regulator sees the main goal of returning inflation to the level of 2% and is ready for a further increase in the key rate. 

Traditionally tough monetary methods, in particular rate hikes, strengthen the US dollar. For example, paired with the Japanese yen, the dollar rose above 140 yen for the first time since August 31, 1998. And the strengthening of the US currency, in turn, makes gold less available for purchase in another currency.

The decline in gold quotations is also facilitated by the growth in the profitability of US securities. Thus, the yield of ten-year government bonds (US Treasuries) is growing to 3.284% from the previous closing level of 3.132%. Government bonds, as it is known, are an alternative to the gold direction of «safe» investments.

Analysts note that the weakness of gold may continue if the markets do not see a correction in the dollar and bond yields in the near future.