The gold price has seen a four-day rally during the mid-North American session, gaining momentum as traders in the United States returned to their desks and absorbed the latest economic developments. Reports of China lowering interest rates contributed to gold’s upward movement, coupled with a decline in US Treasury bond yields.
Upon resumption of trading in the US after Monday’s Presidents’ Day holiday, gold prices received a boost as US Treasury bond yields dipped. The 10-year note yield, in particular, decreased by four basis points to 4.256%. This move came despite a cautious stance among investors regarding the US Federal Reserve (Fed), with data from the Chicago Board of Trade (CBOT) projecting a more modest 102-basis-point rate cut in 2024, down from the 180 bps estimated in mid-January.
The resumption of trading also saw the US Dollar (USD) maintaining a steady position, with limited economic data on the US docket at that time. Traders are eagerly awaiting the release of the latest Federal Open Market Committee (FOMC) Meeting Minutes, which is expected to provide insights into the central bank’s perspectives and potential future policy directions.
The gold market‘s positive trajectory has been further supported by last week’s data from the US, revealing that both the Consumer Price Index (CPI) and the Producer Price Index (PPI) surpassed estimates. This data has raised concerns about the persistence of inflation, reinforcing gold’s appeal as a hedge against economic uncertainties.
At the time of reporting, the XAU/USD is trading at $2,028.44, marking a 0.52% increase. The gold market’s response to global economic factors, including China’s policy decisions and US bond yield movements, underscores the metal’s role as a key asset in times of market volatility and inflationary pressures. Investors continue to monitor developments closely, seeking insights from central bank actions and economic indicators to navigate the evolving landscape.
