Gold climbs as US dollar, bond yields slip
GOLD prices rose on Tuesday (Dec 5), as the US dollar and Treasury yields fell after traders slightly pared bets for an interest rate cut by the US Federal Reserve in the first quarter of 2024.
Spot gold was up 0.4 per cent at US$2,037.29 per ounce by 0328 GMT. Bullion had surged to an all-time high of US$2,135.40 on Monday, before dropping over US$100 in a single day to close 2 per cent lower.
US gold futures for February delivery rose 0.7 per cent to US$2,055.50.
Gold prices surged in the previous session as investors’ confidence was elevated about a rate cut following Fed chair Jerome Powell’s comments on Friday.
The US dollar index fell 0.1 per cent against a basket of currencies, making gold less expensive for other currency holders.
Yields on 10-year Treasury notes slipped to 4.2587 per cent.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Lower interest rates reduce the opportunity cost of holding non-interest-bearing bullion.
However, traders have lowered their rate cut bets by March next year to about 60 per cent, from 70 per cent on early Monday, CME’s FedWatch Tool shows.
The Fed appears on track to end the year with interest rate hikes as a thing of the past, but with a coming challenge over when and how to signal a turn to rate cuts.
Investors are awaiting the closely-watched US non-farm payrolls data on Friday, which could help further gauge the interest rate outlook.
Data last week pointed out to cooling inflationary pressures, and a gradually easing labour market, reinforcing the notion of an early rate cut.
Israeli forces pressed ahead with their air and ground bombardment of southern Gaza Strip, killing and wounding dozens of Palestinians, even as the United States and the United Nations repeatedly urged them to protect civilians.
Spot silver rose 0.2 per cent to US$25.55 per ounce, palladium fell 0.1 per cent to US$975.35 per ounce, while platinum slipped 0.2 per cent to US$915.32. REUTERS
Share with us your feedback on BT's products and services
