US treasury yields rise and greenback strengthens after data indicates the Fed might slow the pace of rate cuts this year
08 January 2025 - 07:25
byRahul Paswan
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Bengaluru — Gold prices edged lower on Wednesday, pressured by higher US treasury yields and a stronger dollar after data suggested the Federal Reserve might slow the pace of rate cuts this year.
Spot gold slipped 0.1% to $2,648.16/oz by 3.08am GMT. US gold futures fell 0.1% to $2,662.30.
“The dollar index bounced back on hopes that we may see bit of a less volatile monetary policy from the Fed this year so overall there is some weakness in gold prices being displayed,” said Kelvin Wong, Oanda senior market analyst for Asia Pacific.
The dollar strengthened and benchmark 10-year treasury yield hit an eight-month high after data on Tuesday pointed to a strong economy.
US job openings in November grew to 8.098-million, exceeding forecasts, and higher than October’s numbers of 7.839-million.
Markets are currently pricing in the probability of just one Fed cut in 2025, down from two in December, according to the CME FedWatch tool.
The market now awaits US nonfarm payrolls report on Friday for more clues on the Fed’s policy path. ADP employment numbers and the minutes from the Fed’s December meeting, due later in the day, are also on investors’ radar.
“Any softness in the US macro data this week could open the door for gains if investors become more optimistic about the deliverance of interest rate cuts from the Fed in 2025,” said analysts at KCM Trade in a note.
The Fed’s projections in December implied a shift to a more cautious pace of rate cuts this year, with most policymakers expressing concern that inflation could reignite.
Bullion is considered a hedge against inflation, but high rates reduce the nonyielding asset’s appeal.
Meanwhile, top consumer China added gold to its reserves in December for a second consecutive month, official data by the People’s Bank of China showed on Tuesday.
Spot silver added 0.3% to $30.11/oz, platinum dropped 0.5% to $946.11 and palladium edged 0.2% lower to $923.87.
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 on stronger dollar
US treasury yields rise and greenback strengthens after data indicates the Fed might slow the pace of rate cuts this year
Bengaluru — Gold prices edged lower on Wednesday, pressured by higher US treasury yields and a stronger dollar after data suggested the Federal Reserve might slow the pace of rate cuts this year.
Spot gold slipped 0.1% to $2,648.16/oz by 3.08am GMT. US gold futures fell 0.1% to $2,662.30.
“The dollar index bounced back on hopes that we may see bit of a less volatile monetary policy from the Fed this year so overall there is some weakness in gold prices being displayed,” said Kelvin Wong, Oanda senior market analyst for Asia Pacific.
The dollar strengthened and benchmark 10-year treasury yield hit an eight-month high after data on Tuesday pointed to a strong economy.
US job openings in November grew to 8.098-million, exceeding forecasts, and higher than October’s numbers of 7.839-million.
Markets are currently pricing in the probability of just one Fed cut in 2025, down from two in December, according to the CME FedWatch tool.
The market now awaits US nonfarm payrolls report on Friday for more clues on the Fed’s policy path. ADP employment numbers and the minutes from the Fed’s December meeting, due later in the day, are also on investors’ radar.
“Any softness in the US macro data this week could open the door for gains if investors become more optimistic about the deliverance of interest rate cuts from the Fed in 2025,” said analysts at KCM Trade in a note.
The Fed’s projections in December implied a shift to a more cautious pace of rate cuts this year, with most policymakers expressing concern that inflation could reignite.
Bullion is considered a hedge against inflation, but high rates reduce the nonyielding asset’s appeal.
Meanwhile, top consumer China added gold to its reserves in December for a second consecutive month, official data by the People’s Bank of China showed on Tuesday.
Spot silver added 0.3% to $30.11/oz, platinum dropped 0.5% to $946.11 and palladium edged 0.2% lower to $923.87.
Reuters
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