Gold’s price trajectory remains contained within a narrow range, reversing course from Tuesday’s movements and advancing on Wednesday. This shift follows the release of mixed US economic indicators, prompting speculation about potential adjustments to borrowing costs by the US Federal Reserve (Fed). Consequently, US Treasury yields witnessed a decline, and the Greenback strengthened, albeit failing to suppress the upward momentum of the precious metal. XAU/USD trades at $2,353, marking a notable uptick of 1.18%.
The US 10-year benchmark note coupon continued its weekly decline, dropping by three basis points to 4.297%, reaching its lowest level since April, driven by a softer-than-anticipated US jobs report.
Despite these developments, the Institute for Supply Management (ISM) report indicated ongoing expansion in the US service sector, providing support to both the Greenback and Gold.
The US Dollar Index (DXY), tracking the performance of the Greenback against a basket of six currencies, recorded a 0.22% increase, reaching 104.7.
Continued downward pressure on US yields stemmed from investor expectations of more than a 25-basis-point rate cut by the end of 2024. Traders, utilizing data from the Chicago Board of Trade (CBOT), particularly from the December 2024 fed funds futures contract, project a potential 37-basis-point easing.
Gold’s momentum was further buoyed by stabilized commodity prices following Tuesday’s significant drop, which saw a decline of over 4% during the initial two days of the week. Additionally, optimistic Caixin PMI data from China hints at sustained economic growth.
Consequently, US Treasury bond yields experienced a notable decline, while the Greenback extended its losses for the third consecutive day, with the US 10-year Treasury bond yields plunging by eleven basis points to 4.392%.
