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Gold rates verge down as dollar rebound counters price-cut optimism
(MENAFN) Gold prices experienced slight declines on Tuesday, influenced by a rebound in the U.S. dollar and divergent sentiments regarding potential Federal Reserve interest rate cuts later this year.
As of 0644 GMT, spot gold edged down by 0.2 percent to USD2,403.22 per ounce, following a recent slide to its lowest levels since July 26 amidst broader market concerns about a possible United States economic downturn. Concurrently, United States gold futures also dipped marginally by 0.02 percent to USD2,443.80.
The strengthening of the United States dollar, which rose approximately 0.3 percent against major currency rivals, contributed to the downward pressure on gold prices. Similarly, an increase in benchmark 10-year Treasury yields further dampened bullion's appeal.
Investors are closely monitoring Federal Reserve officials' comments, which have reinforced expectations of significant interest rate cuts in the coming months. Currently, market forecasts suggest a likelihood of a 50 basis points cut in September, with expectations totaling 110 basis points of easing by year-end, highlighting divergent views on economic stimulus measures.
The prospect of lower interest rates typically diminishes the attractiveness of the dollar and bond yields, thereby enhancing the appeal of non-yielding assets like gold. However, conflicting market signals amid economic uncertainties have contributed to a mixed sentiment in gold markets.
Meanwhile, spot silver prices declined by 1.5 percent to USD26.87 per ounce, while platinum saw a modest increase of 1.2 percent to USD917.40. In contrast, palladium prices dipped by 0.32 percent to USD846.98 after hitting their lowest levels since August 2018 on Monday, reflecting varying investor preferences amidst evolving market conditions.
As of 0644 GMT, spot gold edged down by 0.2 percent to USD2,403.22 per ounce, following a recent slide to its lowest levels since July 26 amidst broader market concerns about a possible United States economic downturn. Concurrently, United States gold futures also dipped marginally by 0.02 percent to USD2,443.80.
The strengthening of the United States dollar, which rose approximately 0.3 percent against major currency rivals, contributed to the downward pressure on gold prices. Similarly, an increase in benchmark 10-year Treasury yields further dampened bullion's appeal.
Investors are closely monitoring Federal Reserve officials' comments, which have reinforced expectations of significant interest rate cuts in the coming months. Currently, market forecasts suggest a likelihood of a 50 basis points cut in September, with expectations totaling 110 basis points of easing by year-end, highlighting divergent views on economic stimulus measures.
The prospect of lower interest rates typically diminishes the attractiveness of the dollar and bond yields, thereby enhancing the appeal of non-yielding assets like gold. However, conflicting market signals amid economic uncertainties have contributed to a mixed sentiment in gold markets.
Meanwhile, spot silver prices declined by 1.5 percent to USD26.87 per ounce, while platinum saw a modest increase of 1.2 percent to USD917.40. In contrast, palladium prices dipped by 0.32 percent to USD846.98 after hitting their lowest levels since August 2018 on Monday, reflecting varying investor preferences amidst evolving market conditions.
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