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May 27, 2024
PI Global Investments
Gold

Gold ticks up as dollar softens, yields fall


Gold prices edged higher on Thursday, helped by a softer U.S. dollar and lower Treasury yields, but hovered near five-week lows as investors tempered rate-cut optimism after hawkish comments from central bank officials and robust data.

 

FUNDAMENTALS

* Spot gold rose 0.2% to $2,010.59 per ounce by 0121 GMT, a day after it fell to $2,001.72 – its lowest since Dec. 13.

* U.S. gold futures rose 0.3% to $2,012.40.

* The U.S. dollar fell 0.2%, making greenback-priced gold less expensive for foreign currency holders. Yields on the benchmark U.S. 10-year Treasury notes also dropped.

* U.S. retail sales increased more than expected in December, keeping the economy on solid ground heading into the new year.

* Atlanta Federal Reserve President Raphael Bostic is expected to speak at two separate events later in the day.

* Bostic said inflation could “see-saw” if policymakers cut rates too soon, warning that inflation’s descent towards the central bank’s 2% goal was likely to slow in the months ahead, the Financial Times reported on Sunday.

* Money markets were betting on 142 basis points of Fed rate cuts this year, while pricing in a 61% chance of a March easing, according to LSEG’s interest rate probability app, IRPR.

* Lower interest rates decrease the opportunity cost of holding bullion.

* Britain’s annual rate of consumer price inflation sped up for the first time in 10 months in December.

* Market participants also monitored developments in the Middle East as Israel pressed its assault on southern Gaza.

* The United States conducted another round of strikes against Houthi targets in Yemen after militants claimed their second attack this week on a U.S. operated vessel in the Red Sea region.

* Spot silver rose 0.4% to $22.61 per ounce, platinum climbed 0.2% to $885.38, and palladium gained 1.2% to $926.54.

DATA/EVENTS (GMT) 0430 Japan Industrial O/P Rev Nov 0930 S. Africa Gold Production YY Nov 1230 US Fed’s Raphael Bostic speaks — 1330 US Initial Jobless Clm w/e Jan. 13 1330 US Housing Starts Number Dec 1330 US Phily Fed Business Indx Jan 1400 Russia Foregin Trade Nov 1705 US Fed’s Raphael Bostic speaks — 1800 US 10Y TIPS Auc — 2330 Japan CPI, Nationwide Dec (Reporting by Harshit Verma in Bengaluru; Editing by Subhranshu Sahu)

 



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