Metal falls for a fifth consecutive session, under pressure from stronger dollar and rising treasury yields
14 November 2024 - 07:37
byRahul Paswan
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Bengaluru — Gold fell for a fifth consecutive session on Thursday to hit its lowest level in eight weeks, pressured by a stronger dollar and rising treasury yields amid uncertainty over the pace of the Federal Reserve’s interest rate cuts.
Spot gold was down 0.6% at $2,559.39/oz by 2.44am GMT, after hitting its lowest since September 19 earlier in the session. US gold futures fell 0.9% to $2,564.00.
The dollar advanced to a one-year high, making gold more expensive for overseas buyers, while treasury yield rose to its highest since July.
“For the time being, gold is just pushed around by the dollar and yields, which is creating this mechanical drop in the short term,” said Kyle Rodda, financial market analyst at Capital.com.
“While last night’s inflation data suggests that the Fed might be able to lower things slightly next month, the next year is being driven by expectations of higher inflation and therefore fewer rate cuts.”
Data released on Wednesday showed that US consumer prices increased as expected in October, and progress towards low inflation has slowed in recent months.
Gold is considered a hedge against inflation, but higher interest rates dampen the appeal of holding the non-yielding asset.
Meanwhile, Fed officials remain cautious about future rate cuts, citing potential risks to inflation.
While St Louis Fed president Alberto Musalem expects inflation to gradually decline, Dallas Fed president Logan warned against excessive easing that could reignite inflationary pressures.
Investors are awaiting the US producer price index (PPI) and weekly jobless claims data, both due at 1.30pm GMT, as well as comments from Fed chair Jerome Powell, who is scheduled to speak later in the day.
Spot silver fell 0.9% to $30.05/oz, its lowest level since September 19. Platinum lost 0.5% to $933.10 and palladium dropped 0.8% to $925.75.
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.
Firmer dollar sends gold to eight-week low
Metal falls for a fifth consecutive session, under pressure from stronger dollar and rising treasury yields
Bengaluru — Gold fell for a fifth consecutive session on Thursday to hit its lowest level in eight weeks, pressured by a stronger dollar and rising treasury yields amid uncertainty over the pace of the Federal Reserve’s interest rate cuts.
Spot gold was down 0.6% at $2,559.39/oz by 2.44am GMT, after hitting its lowest since September 19 earlier in the session. US gold futures fell 0.9% to $2,564.00.
The dollar advanced to a one-year high, making gold more expensive for overseas buyers, while treasury yield rose to its highest since July.
“For the time being, gold is just pushed around by the dollar and yields, which is creating this mechanical drop in the short term,” said Kyle Rodda, financial market analyst at Capital.com.
“While last night’s inflation data suggests that the Fed might be able to lower things slightly next month, the next year is being driven by expectations of higher inflation and therefore fewer rate cuts.”
Data released on Wednesday showed that US consumer prices increased as expected in October, and progress towards low inflation has slowed in recent months.
Gold is considered a hedge against inflation, but higher interest rates dampen the appeal of holding the non-yielding asset.
Meanwhile, Fed officials remain cautious about future rate cuts, citing potential risks to inflation.
While St Louis Fed president Alberto Musalem expects inflation to gradually decline, Dallas Fed president Logan warned against excessive easing that could reignite inflationary pressures.
Investors are awaiting the US producer price index (PPI) and weekly jobless claims data, both due at 1.30pm GMT, as well as comments from Fed chair Jerome Powell, who is scheduled to speak later in the day.
Spot silver fell 0.9% to $30.05/oz, its lowest level since September 19. Platinum lost 0.5% to $933.10 and palladium dropped 0.8% to $925.75.
Reuters
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