A view of ingots of 99.99 percent pure gold, which are placed in a workroom, at Novosibirsk Refining Plant, Russia’s leading gold refining and bar manufacturing plant, in Novosibirsk, Russia on September 15, 2023.
Alexander Manzyuk | Anadolu Agency | Getty Images
Gold prices lingered near their lowest level in almost two weeks on Tuesday, pressured by a firmer dollar and elevated Treasury yields, as traders lowered expectations of aggressive interest rate cuts by the U.S. Federal Reserve this year.
Spot gold was down 0.1% at $2,023.42 per ounce, as of 0352 GMT, after hitting its lowest since Jan. 25 in the previous session.
U.S. gold futures fell 0.2% to $2,039.40 per ounce.
With Fed pushing back on rate cuts and strong economic data in the U.S., nothing has been left to support gold other than geopolitical tensions in the Middle East, said Ajay Kedia, director at Kedia Commodities in Mumbai.
Two Fed officials said that the U.S. central bank did not need to be overly concerned by recent higher-than-expected economic growth and employment figures and could take time before deciding to reduce interest rates, echoing Powell’s prudence in determining when to cut rates.
Data released on Monday showed that the U.S. services sector growth picked up in January after Friday’s blowout U.S. jobs report that dashed prospects of early Fed rate cuts.
The dollar index hovered near a three-month high, making bullion more expensive for other currency holders, while yields on benchmark 10-year Treasury held above 4%.
Traders have repriced their bets to four quarter-point cuts for 2024, down from six last Monday, according to LSEG’s interest rate probability app IRPR.
Investors are awaiting remarks from at least eight Fed speakers this week for further clues on the timing of rate cuts.
China, the world’s top buyer of physical gold, “is going on its spring holiday, and after seeing festive demand in the run up to the Lunar New Year, we now expect some consolidation in physical market as buying sentiments are slightly lagging behind,” said Kedia.
Spot silver fell 0.1% to $22.33 per ounce, while palladium rose 0.7% to $955.26 and platinum edged 0.2% higher to $898.15.