Perpetual Active Gold ETF Drops as Dollar Strength, 5% Yields Weigh
Gold prices tied to AAAU ETF fell steeply as the U.S. dollar index rallied and Treasury yields approached the 5% threshold on expectations of tighter financial conditions. Goldman Sachs maintained its $5,400/oz year-end gold forecast despite a surprise drop in U.S. weekly jobless claims.
1. Price Pressure from Dollar and Yields
AAAU shares slipped as the U.S. dollar index jumped, boosting the greenback’s purchasing power against gold. Concurrently, 10-year Treasury yields climbed toward the critical 5% level, tightening financial conditions and increasing the opportunity cost of holding non-yielding bullion.
2. Labor Data Ignored by Gold
Gold’s sharp decline persisted even after weekly U.S. jobless claims unexpectedly fell, indicating stronger labor markets. Traders appeared focused on macro drivers such as currency strength and rising yields rather than short-term economic data releases.
3. Goldman Sachs’ Year-End Forecast
Despite recent weakness, Goldman Sachs reaffirmed its $5,400 per ounce year-end target for gold, citing long-term inflation hedging and safe-haven demand. The forecast underscores confidence in gold’s role amid ongoing market volatility and rising real yields.