Why now might be a good time to buy gold and gold juniors

Gold has been taking a beating in recent weeks, the sell-off prompted by rising bond yields which are taking the shine off the yellow metal. Higher interest rates diminish the argument for owning gold, which offers no yield.

On Wednesday, Feb. 24, spot gold dropped to $1,784.60 an ounce, just shy of $1,783.10 reached on Feb. 21, its lowest since July, 2020. The gold price climbed $342, or 22% last year, on pandemic fears, a low dollar and moribund bond yields, which for most of the year ran under 1%.

Gold has been pressured by higher yields on US Treasuries, most significantly the benchmark 10-year note, which is closing in on 1.4% (currently 1.37%), an increase of 44 basis points since the start of the year. The last time the 10-year was this high, was in February 2020, just before the start of the pandemic.