Precise Investors

Alternative Investments

Gold below record high as dollar, Treasury yields hold firm


Spot gold was unchanged at $2,250.79 per ounce, holding below an all-time high of $2,265.49 reached on Monday

Gold prices on Tuesday stayed below record highs hit in the earlier session, as the U.S. dollar and Treasury yields held firm after strong U.S. data flagged doubts on whether the Fed would deliver three interest rate cuts in 2024.

Spot gold was unchanged at $2,250.79 per ounce, as of 0415 GMT, holding below an all-time high of $2,265.49 reached on Monday. U.S. gold futures advanced 0.6 per cent to $2,271.30.

Gold notched up a new record, though with that high watermark also came some overbought conditions, which has resulted in a slight pullback. However, recent pullbacks in gold have been shallow in nature due to potential buyers waiting on the sidelines for better entry points, according to Tim Waterer, chief market analyst at KCM Trade.

Bullion’s gains were held in check as the U.S. dollar stayed near a 4-1/2-month high, while benchmark U.S. 10-year Treasury yields were trading near their highest levels in two weeks after data showed U.S. manufacturing increased for the first time in 1-1/2 years in March.

Traders lowered bets of a June interest rate cut to 63 per cent following the data, according to the CME Group’s FedWatch Tool.

Federal Reserve Chair Jerome Powell on Friday hinted the latest U.S. inflation data did not undermine the central bank’s baseline outlook, but said with the economy on a strong footing, “that means we do not need to be in a hurry to cut”.

Traders will be casting an eye towards Friday’s U.S. nonfarm payrolls release, because if we happen to see another strong jobs report this could provide a catalyst for a gold retreat, according to Waterer.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Precise Investors. The information provided on Precise Investors is intended for informational purposes only. Precise Investors is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

Leave a Reply