Advertisements
Home Gold Prices Gold Prices Slip Below $2,000 as Dollar Strengthens & Treasury Yields Rebound

Gold Prices Slip Below $2,000 as Dollar Strengthens & Treasury Yields Rebound

by anna

On Wednesday, gold prices dipped below the crucial $2,000 per ounce level. The decline was attributed to the U.S. dollar’s rebound from its lows and a recovery in Treasury yields. Despite these factors, expectations that the Federal Reserve will pause rate hikes helped limit the downward pressure on gold.

As of 3:05 p.m. ET (2005 GMT), spot gold was down 0.4% at $1,991.16 per ounce, marking its most substantial daily decline since November 10. Simultaneously, U.S. gold futures settled 0.4% lower at $1,991.30.

Advertisements

According to Jim Wyckoff, a senior analyst at Kitco Metals, the rally in the dollar index to its daily highs is curbing some buying interest in gold. Conflicting market forces are creating a stable, holiday-type trade environment.

Advertisements

The dollar index experienced a 0.3% increase against its counterparts, while Treasury yields recovered losses following robust initial jobless claims data. This data disrupted the market, which had anticipated the Federal Reserve to commence rate cuts around June as the U.S. economy slows down.

Advertisements

Typically, lower interest rates contribute to higher gold prices by reducing the opportunity cost of holding non-yielding assets. Gold had reached a three-week peak of $2,007.29 in the previous session.

Advertisements

Daniel Ghali, a commodity strategist at TD Securities, noted that the rise in market expectations for the Fed‘s cutting cycle to begin earlier in 2024 has been the primary force propelling gold prices higher over the past week.

Minutes from the Federal Reserve’s October 31-November 1 meeting revealed that officials agreed to proceed “carefully” and raise interest rates only if progress in controlling inflation faltered.

In other precious metals, spot silver fell 0.4% to $23.66 per ounce. Platinum experienced a 1.2% decline to $923, while palladium slipped 2% to $1,056.91, both marking their most significant daily drops since November 10.

Advertisements

You may also like

Lriko logo

Lriko is a gold portal website, the main columns include gold pricespot goldsilver pricespot silvergold futures, nonfarm payroll, gold basics, gold industry news, etc.

© 2023 Copyright  lriko.com