Gold slips as US dollar, Treasury yields gain

GOLD fell slightly on Tuesday (Jan 16) as the US dollar and Treasury yields jumped, with investors awaiting comments from a host of Federal Reserve speakers this week for more clarity on the central bank’s interest rate trajectory.

Spot gold was down 0.2 per cent at US$2,050.35 per ounce, as at 0201 GMT.

US gold futures rose 0.1 per cent to US$2,054.10.

The US dollar index leapt to a 10-day high, making bullion less attractive for other currency holders, while yields on benchmark US 10-year Treasury notes rose to near 4 per cent levels.

At the end of its Jan 30 to 31 meeting, the Fed is expected to hold its policy rate steady.

Traders are betting on six rate cuts of 25 basis points each this year, with about a three-in-four chance that the first one could come as soon as March, according to LSEG’s interest rate probability app, IRPR.

Lower interest rates increase non-yielding bullion’s appeal.

A host of Fed officials are due to speak this week, with Fed governor Christopher Waller scheduled to deliver a speech on the economic outlook before the Brookings Institution at 1600 GMT.

Elsewhere, European Central Bank officials pushed back against market expectations for rapid rate cuts this year.

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Gold extends gains as Middle East turmoil lifts appeal

Japan’s wholesale inflation was flat in December from a year earlier, slowing for the 12th consecutive month, underscoring the central bank’s view that cost-push pressure from rising raw material prices will steadily dissipate.

Yemen’s Houthi movement will expand its targets in the Red Sea region to include US ships, an official from the Iran-allied group said on Monday, as it vowed to keep up attacks after US and British strikes on its sites in Yemen.

Spot silver fell 0.2 per cent to US$23.15 per ounce, platinum declined 0.4 per cent to US$911.59, and palladium slipped 0.3 per cent to US$968.96. REUTERS