Gold prices have retreated by approximately 0.90% during the mid-North American session on Tuesday, trading at $2,328 per ounce. This decline occurs amid a risk-off impulse and despite falling US Treasury bond yields. The latest tranche of US economic data indicates a slowdown in the economy, reinforcing the case for lower interest rates. Nevertheless, XAU/USD continues to trade with losses.
The price of gold has dipped below $2,350 per troy ounce, reflecting a broader plunge across commodities. Oil prices have also been under significant pressure due to fears that a slower global economic growth could dampen demand for crude.
US Treasury yields, which typically have an inverse correlation with gold prices, fell by seven basis points for the 10-year Treasury yield. Despite this, the US Dollar (USD) has made marginal gains, with the US Dollar Index (DXY) up by 0.04% to 104.08. The DXY tracks the USD against a basket of six major currencies.
On the economic front, the US docket featured the release of April’s Job Openings and Labor Turnover Survey (JOLTS) and Durable Goods Orders. These reports highlighted an economy that remains resilient but shows signs of weakness under the pressure of higher borrowing costs imposed by the Federal Reserve (Fed).
Following these data releases, the December 2024 fed funds rate futures contract indicated that most traders expect at least 36 basis points of rate cuts, according to the Chicago Board of Trade (CBOT).
As a result, US Treasury bond yields have dropped, while the Greenback has extended its losing streak to three consecutive days. The interplay between economic data, rate cut expectations, and market reactions continues to shape the trajectory of gold prices and the broader financial landscape.
