“A combination of stability in the U.S. dollar and bond yields, in contrast to what we witnessed at the tail-end of 2023, has effectively applied the brakes to the gold price,” said Tim Waterer, chief market analyst at KCM Trade.
The dollar index ticked up against a basket of currencies, and is up 1.6% so far this month, while yields on 10-year U.S. Treasury notes remained above 4%. [USD/]
Traders will turn their focus to Thursday’s U.S. consumer price inflation report that is expected to show headline inflation rose 0.2% in December and 3.2% on an annual basis.,
“Any signs of softness in the data could be a boon for the gold price,” said Waterer.
An official U.S. report revealed that consumers expect a decline in inflation, while Fed Governor Michelle Bowman said the U.S. central bank’s monetary policy seems “sufficiently restrictive”.
Market participants are pricing in an about 68% chance of a U.S. rate cut in March, according to the CME FedWatch tool.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion.
Spot gold may retest support of $2,016 per ounce, a break below which could open the way towards $2,006, according to Reuters technical analyst Wang Tao. [TECH/C]
Spot silver fell 0.2% to $22.93 per ounce, while platinum rose 0.2% to $931.74, and palladium gained 0.7% to $985.48.
(Reporting by Harshit Verma in Bengaluru; Editing by Rashmi Aich and Sonia Cheema)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.