Gold prices lost 8% this year and analysts expect a further fall in the yellow metal prices. Analysts believe that a stronger-than-expected U.S. jobs report and the resultant rise in the greenback are likely to weigh on the greenback. The U.S. dollar has every reason to gain in the coming days thanks to the upbeat data points.

Inside the Upbeat Economic Datapoints

The U.S. economy added 943,000 jobs in July 2021, the maximum in 11 months and above market expectations of 870,000. The job gains followed a similar increase in June (+938,000) (read: 4 Sector ETFs to Sizzle on Solid July Jobs Data).

The U.S. unemployment rate declined to 5.4% in July 2021, below market expectations of 5.7%. The number of unemployed persons dropped by 782,000 to 8.7 million. These measures have improved substantially from their highs at the end of the February-April 2020 recession.

Meanwhile, the Senate has passed a $1 trillion infrastructure bill, which would be one of the most substantial federal investments in roads, bridges and rails in decades. The bill, which includes $550 billion in new spending on roads, bridges, and Internet access, will now head to the House of Representatives.

Further, the U.S. economy returned to the pre-pandemic level with GDP rising 6.5% annually in the second quarter, indicating a sustained recovery from the pandemic recession, while consumer confidence rose to a 17-month high in July.

If these were not enough, Atlanta Federal Reserve Bank President Raphael Bostic said he is eyeing the fourth quarter for the start of a bond-purchase taper but can support an even earlier start if the job market records a faster improvement.

Moreover, both Bostic and Richmond Fed President Tom Barkin believe that inflation has already hit the Fed's 2% goal, according to their separate assessments, as quoted on a source. And this is where the Fed could rely on for policy tightening (read: 4 Bond ETFs to Play If Rates Rise).

U.S. benchmark Treasury yields started the month with 1.20% while it ended Aug 12 at 1.36%. If QE taper starts, there could be further ascent in the treasury yields. This should boost the U.S. dollar prices and gold shares an inverse relationship with the greenback.

Dominic Schnider, chief investment officer at UBS Global Wealth Management, predicts that real yields will “go less negative” and that is a headwind for gold, as quoted on CNBC. Notably, the real U.S. benchmark treasury yield was negative 1.05% on Aug 12 versus negative 1.17% on Aug 2. Since gold is a non-interest-bearing asset, a rise in real yield is a negative for gold investing. Dominic expects fund outflows from the gold exchange-traded funds and futures markets.

Vivek Dhar, commodities analyst at the Commonwealth Bank of Australia expects gold prices to decline to $1,700 per ounce by the first quarter of 2022 while Schnider forecast that gold could see decline to $1,600 per ounce or lower, as quoted on the same CNBC article. Gold is currently trading around the $1757.40 level.

Against this backdrop, investors may short gold and bet on the below-mentioned exchange-trade products.

ETFs in Focus

ProShares UltraShort Gold (GLL Quick QuoteGLL - Free Report) – Up 13.2% This Year

DB Gold Double Short Exchange Traded Notes (DZZ Quick QuoteDZZ - Free Report) – Up 8.8% This Year

DB Gold Short Exchange Traded Notes (DGZ Quick QuoteDGZ - Free Report) – Up 7.1% This Year