Gold prices stabilize amid rising yields of dollar, treasuries

(MENAFN) On Tuesday, gold prices demonstrated resilience despite a strengthening dollar and rising Treasury bond yields, as investors eagerly awaited insights from the Federal Reserve's latest meeting minutes regarding potential interest rate adjustments. The spot price of gold stabilized at USD2,018.03 per ounce during trading, while US gold futures saw a modest increase of 0.3 percent to USD2,029.10 per ounce.

The ascent of the dollar index by 0.1 percent and the near four percent rise in benchmark 10-year Treasury bond yields posed challenges for gold, which is priced in US currency and consequently becomes less appealing to foreign buyers under such conditions. Market participants are eagerly anticipating the release of the minutes from the Federal Reserve's January monetary policy meeting, scheduled for Wednesday, to glean further insights into the central bank's stance on interest rate adjustments.

Despite commendable strides in containing inflation within the United States, Mary Daly, the head of the US Federal Reserve in San Francisco, emphasized the ongoing necessity for efforts to ensure price stability, indicating a cautious approach towards monetary policy. Furthermore, another senior bank official cautioned that any potential interest rate cuts would likely be deferred for an extended period.

Last week's release of US consumer and producer price data, which surpassed expectations, dampened hopes for an imminent federal interest rate cut in March. Lower interest rates typically diminish the opportunity cost associated with holding bullion, thus exerting upward pressure on gold prices.

In tandem with the movement in gold, other precious metals experienced mixed fortunes. Platinum prices in spot transactions dipped by 0.6 percent to USD893.16 per ounce, while palladium saw a decline of 0.8 percent to USD946.41 per ounce. Similarly, silver prices dropped by 0.4 percent to USD22.93 per ounce, reflecting the complex interplay of factors influencing the precious metals market amidst evolving economic conditions.


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