Metal loses ground as dollar strengthens, while investors mull size and timing of US interest rate cuts
07 August 2024 - 08:29
byDaksh Grover
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Gold has always been seen as a safe haven asset. Picture: 123RF
Bengaluru — Gold prices edged lower on Wednesday as the dollar and treasury yields strengthened, while traders awaited further cues to gauge the size of the Federal Reserve’s likely September interest rate cut.
Spot gold slipped 0.2% to $2,385.60/oz by 3.10am GMT. US gold futures fell 0.3% to $2,425.30.
“A rebound in US treasury yields and a firmer dollar translate to some downward pressures on gold prices this morning, as pockets of resilience in US economic data seem to prompt a reassessment of market recession concerns,” said IG market strategist Yeap Jun Rong.
Downside in gold could be limited by Middle East tension and lingering global recession concerns, as markets awaited further economic data for clarity on US conditions, Yeap said.
The dollar index rose to 103.25, making the greenback-priced bullion less affordable for overseas buyers.
Traders have altered their rate cut expectations after the soft jobs report last week, with nearly 105 basis points (bps) of cuts anticipated by year-end.
However, markets are also pricing in a 65% chance of the Fed cutting rates by 50bps in September, CME FedWatch tool showed, compared with 85% a day ago.
San Francisco Fed president Mary Daly said on Monday that many details in the jobs report leave “a little more room for confidence that we’re slowing but not falling off a cliff”.
The US had communicated to Iran and Israel that conflict in the Middle East should not escalate, secretary of state Antony Blinken said on Tuesday, even as the Pentagon warned that it would not tolerate attacks against its forces in the region.
Spot silver edged 0.1% higher to $27.0561/oz, platinum rose 0.3% to $915.20 and palladium was up 0.3% to $877.24.
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 slips as traders wait for rate cut cues
Metal loses ground as dollar strengthens, while investors mull size and timing of US interest rate cuts
Bengaluru — Gold prices edged lower on Wednesday as the dollar and treasury yields strengthened, while traders awaited further cues to gauge the size of the Federal Reserve’s likely September interest rate cut.
Spot gold slipped 0.2% to $2,385.60/oz by 3.10am GMT. US gold futures fell 0.3% to $2,425.30.
“A rebound in US treasury yields and a firmer dollar translate to some downward pressures on gold prices this morning, as pockets of resilience in US economic data seem to prompt a reassessment of market recession concerns,” said IG market strategist Yeap Jun Rong.
Downside in gold could be limited by Middle East tension and lingering global recession concerns, as markets awaited further economic data for clarity on US conditions, Yeap said.
The dollar index rose to 103.25, making the greenback-priced bullion less affordable for overseas buyers.
Traders have altered their rate cut expectations after the soft jobs report last week, with nearly 105 basis points (bps) of cuts anticipated by year-end.
However, markets are also pricing in a 65% chance of the Fed cutting rates by 50bps in September, CME FedWatch tool showed, compared with 85% a day ago.
San Francisco Fed president Mary Daly said on Monday that many details in the jobs report leave “a little more room for confidence that we’re slowing but not falling off a cliff”.
The US had communicated to Iran and Israel that conflict in the Middle East should not escalate, secretary of state Antony Blinken said on Tuesday, even as the Pentagon warned that it would not tolerate attacks against its forces in the region.
Spot silver edged 0.1% higher to $27.0561/oz, platinum rose 0.3% to $915.20 and palladium was up 0.3% to $877.24.
Reuters
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