The price of gold has been on a downward trend, with the global economic situation not showing positive signs of stimulating high demand for the precious metal.

The prevailing market trend – largely due to what is happening in the US economy – has led to a softening of gold prices as investors shy away from the commodity.

One main economic indicator is that US government bonds have hit a one-year high of more than 1.6 per cent, a 10-year record.

As bond rates continue to move above 1.5 per cent, investors opt to invest in them rather than gold.

The US has also been selling bonds to raise funds for the $1.9 trillion economic stimulus package.

“President Joe Biden’s $1.9 trillion economic stimulus package will provide enough resources to support the recovery of the US economy,” US Treasury Secretary Janet Yellen tweeted on Monday.

And in an interview with MSNBC on the same day, Yellen said that the Covid-19 relief package the Senate has passed would be very beneficial for the recovery of the American economy.

She also expressed hope that the US would be “back to full employment” next year – an important indicator that the economy is gaining steam.

This scenario could take away gold’s shine.

The price of gold will continue to fall between $1,705 to $1,686 per ounce, and traders are advised to wait to position a long-term buy when the price falls to $1,686 per ounce, setting the take-profit function at $1,720 per ounce and the stop-loss function at $ 1,668 per ounce.