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Gold lower as dollar, yields gain


Spot gold was 0.3% lower at $2,049.20 per ounce, while U.S. gold futures gained 0.1% to $2,052.90

Gold prices were subdued on Tuesday as the dollar and Treasury yields gained, while traders waited to hear from a number of U.S. Fed speakers this week for further clarity on the central bank’s rate cut prospects.

Spot gold was 0.3% lower at $2,049.20 per ounce, as of 0402 GMT. U.S. gold futures gained 0.1% to $2,052.90.

Weighing on gold, the dollar has firmed ahead of Christopher Waller’s speech, which is arguably the bigger event for the week, said Matt Simpson, a senior analyst at City Index.

The dollar index hit a 10-day high, making bullion less attractive for holders of other currencies, while yields on benchmark U.S. 10-year Treasury notes rose above 4%.

At least six Fed officials are due to speak this week, with Fed Governor Christopher Waller scheduled to deliver a speech on the economic outlook before the Brookings Institution at 1600 GMT.

With multiple rate cuts having been priced in by market, I would not be surprised if Waller feels inclined to push back, a move back to $2035 for spot gold could be plausible, Simpson added.

At the end of its January 30-31 meeting, the Fed is expected to hold its policy rate steady.

Traders are betting on six rate cuts of 25 bps each this year, with nearly a three-in-four probability that the first one could come as soon as March, as per LSEG’s interest rate probability app, IRPR.

Lower interest rates raise non-yielding bullion’s appeal.

Elsewhere, European Central Bank (ECB) officials pushed back against market expectations for rapid rate cuts this year.

Spot silver dropped 0.4% to $23.11 per ounce, platinum shed 0.6% to $909.37, and palladium dropped 0.7% to $964.89.

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