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Bengaluru — Gold prices steadied near a three-week high on Tuesday, as lower US treasury yields partially offset pressure from inflation-fearing Federal Reserve and other major central banks that raced each other to ramp up borrowing rates.
Spot gold held its ground at $1,699.09 an ounce at 3.41am GMT, having touched its highest since September 14 at $1,702.39 earlier in the day.
Prices jumped as much as 2.5% in the previous session, boosted by a drop in US treasury yields and the dollar as an economic data showed a slowdown in manufacturing activity, hinting at the impact of Fed’s aggressive rate hikes.
US gold futures rose 0.2% to $1,705.40.
The benchmark US 10-year treasury yields edged closer to a 1½-week low touched on Monday, while the dollar index was flat near Monday’s low.
“People are a little bit leery about chasing gold higher. The market is digesting the fact that Fed’s John Williams still sounded very hawkish and harping on about taming inflation,” said Stephen Innes, managing partner at SPI Asset Management.
Federal Reserve Bank of New York president John Williams said on Monday that while there have been nascent signs of cooling inflation, underlying price pressures remain too high, which means the US central bank must press forward to get inflation under control.
“To take the next level higher we are going to need a week jobs report. The (gold) market may stabilise anywhere between $1,685 and $1,705 ahead of the jobs data,” Innes said.
The US non-farm payrolls due later this week will be closely watched for signals on the Fed’s rate-hike path.
Though gold is seen as a hedge against inflation, higher rates increase the opportunity cost of holding bullion that pays no interest.
Indicative of sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 3.19 tonnes on Monday, their biggest one-day inflow since June.
Spot silver rose 0.3% to $20.82 an ounce, having earlier hit a peak since June 29. Platinum was up 0.3% at $904.72 and palladium gained 1.1% to $2,245.59.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold holds ground near three-week peak
Bengaluru — Gold prices steadied near a three-week high on Tuesday, as lower US treasury yields partially offset pressure from inflation-fearing Federal Reserve and other major central banks that raced each other to ramp up borrowing rates.
Spot gold held its ground at $1,699.09 an ounce at 3.41am GMT, having touched its highest since September 14 at $1,702.39 earlier in the day.
Prices jumped as much as 2.5% in the previous session, boosted by a drop in US treasury yields and the dollar as an economic data showed a slowdown in manufacturing activity, hinting at the impact of Fed’s aggressive rate hikes.
US gold futures rose 0.2% to $1,705.40.
The benchmark US 10-year treasury yields edged closer to a 1½-week low touched on Monday, while the dollar index was flat near Monday’s low.
“People are a little bit leery about chasing gold higher. The market is digesting the fact that Fed’s John Williams still sounded very hawkish and harping on about taming inflation,” said Stephen Innes, managing partner at SPI Asset Management.
Federal Reserve Bank of New York president John Williams said on Monday that while there have been nascent signs of cooling inflation, underlying price pressures remain too high, which means the US central bank must press forward to get inflation under control.
“To take the next level higher we are going to need a week jobs report. The (gold) market may stabilise anywhere between $1,685 and $1,705 ahead of the jobs data,” Innes said.
The US non-farm payrolls due later this week will be closely watched for signals on the Fed’s rate-hike path.
Though gold is seen as a hedge against inflation, higher rates increase the opportunity cost of holding bullion that pays no interest.
Indicative of sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 3.19 tonnes on Monday, their biggest one-day inflow since June.
Spot silver rose 0.3% to $20.82 an ounce, having earlier hit a peak since June 29. Platinum was up 0.3% at $904.72 and palladium gained 1.1% to $2,245.59.
Reuters
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