By Barani Krishnan

Investing.com – Gold prices sank more than 1% on Monday, breaking new ground lower after a week of sideways trading, as market participants tried to suss out a clear direction for the yellow metal amid climbing yields and the dollar.

was Friday’s session was down $20.25, or 1.2%, at $1,712.05  an ounce on New York’s Comex by 11:51 AM ET (15:51 GMT), after falling to as low as $1,705.75. It was the biggest one-day drop in Comex gold since March 18.

The of gold, which fund managers sometimes rely on for direction more than futures, was down $21.03, or 1.2%, at $1,711.66 after an intraday low of $1,706.90.

Yields on the U.S. neared the 1.7% level while the approached the key 93 level, raising fresh pressure on gold. Most other commodities, along with Wall Street’s , and , were lower too.

“Neither the 10-year nor the dollar can be said to be menacingly high for the day, but gold hasn’t had a sizable move in either direction over the past week, so the downsize bias now is probably exaggerated,” said Philip Streible, precious metals strategist at Blueline Futures in Chicago.

“Gold may break below $1,700 support but it should recover.”

Gold bulls have tried unsuccessfully over the past two weeks to break beyond the mid-$1,700 level that would be critical for a return to $1,800 pricing.

In last week’s trade, gold prices went through several hoops before settling slightly lower than where they did a week ago. Most importantly, the market did not crack the key ceiling of $1,750 per ounce, despite coming within less than $4 of meeting that test.

Long associated with tags such as safe-haven, store of value and inflation-hedge, for at least six months now, plunging particularly when market hype over inflation sent Treasury yields soaring instead.

The yellow metal demonstrated the faith placed on it by investors through the height of the pandemic, rising from March 2020 lows of under $1,500 to reach a record high of nearly $2,100. It has plunged since, briefly turning into a bear market when it lost as much 20% to hit lows under $1,675.

While gold has crawled out of that hole, it’s been stuck under $1,750, behaving more like a patient on life support than one on the clear path to recovery.