Gold rebounds as US dollar, yields slip with eyes on Fed guidance
Gold prices inched up on Tuesday, buoyed by a weaker U.S. dollar and bond yields, ahead of a key inflation report and comments from Federal Reserve officials for further clues on when interest rate cuts will commence.
Gold prices inched up on Tuesday, buoyed by a weaker U.S. dollar and bond yields, ahead of a key report and comments from Federal Reserve officials for further clues on when interest rate cuts will commence.Spot gold was up 0.4% at $2,038.15 per ounce as of 1229 GMT, hovering near its highest since Feb. 7 hit on Friday. U.S. gold futures rose 0.4% to $2,047.30 per ounce.
The dollar index extended its losing run, and benchmark 10-year Treasury fell, making greenback-priced bullion more appealing for other holders. [USD/]
"It is a modest uptick in gold, likely driven by slightly lower U.S. long-term interest rates and a moderately weaker dollar. Solid physical demand and central purchases are keeping gold above the $2,000 per ounce," said UBS analyst Giovanni Staunovo.
"We continue to expect the Fed to cut rates around mid-year, that will likely support demand from financial investors and lift the gold price to $2,250 per ounce by the end of this year."
Recent remarks from Fed policymakers suggested the U.S. central bank was in no rush to cut interest rates, largely cementing bets against any rate cuts before June.
Markets are currently pricing in a 63% chance of a Fed rate cut in June, according to the CME FedWatch Tool.
Lower interest rates boost the appeal of holding non-yielding bullion.
At least 10 Fed officials are due to speak this week, while investors are focussed on the core personal consumption expenditures price index, the Fed's preferred inflation gauge, due on Thursday.
China's net gold imports via Hong Kong jumped about 51% in January from the previous month, data showed.
Spot platinum climbed 1.7% to $895.10 per ounce, palladium rose 1.1% to $960.88, and silver edged 0.8% higher to $22.70 per ounce.