Gold prices showed signs of recovery on Tuesday as the U.S. dollar and Treasury yields experienced a slight pullback. This comes as traders eagerly await remarks from Federal Reserve officials to gain insight into the potential pace of interest rate cuts for the year.
The spot gold price rose by 0.3% to $2,030.49 per ounce, rebounding from its previous session’s low since Jan. 25. Meanwhile, U.S. gold futures gained 0.2% to $2,046.70.
The decrease in the dollar by 0.1% and the slight easing of benchmark U.S. 10-year Treasury yields have bolstered gold as a zero-yield asset. Market experts anticipate that Federal Reserve officials will emphasize the need for continued stability on the inflation front before considering a cutting cycle.
Daniel Ghali, a commodity strategist at TD Securities, emphasized the potential for gold prices to strengthen with the upcoming release of Consumer Price Index (CPI) data. A soft print on inflation could elicit a positive response from the gold market.
Additionally, at least eight Federal Reserve speakers are scheduled to deliver remarks this week, adding to the anticipation surrounding the central bank’s future moves.
Furthermore, after a strong jobs report last week, traders have tempered their expectations of a rate cut in March, affecting gold bulls who have been forced to rethink their positions. Market analysts, such as Han Tan of Exinity Group, believe that bullion will likely rise as the possibility of the first Fed rate cut becomes more imminent.
In contrast, uncertainties surrounding a potential delay in the start of the Fed’s policy pivot could prompt gold to unwind some of its recent gains in the interim.
Aside from gold, other precious metals also experienced mixed movements, with spot silver falling 0.2% to $22.32 per ounce, platinum rising 0.3% to $899.12, and palladium edging up 0.1% to $949.64.
The article discusses how gold prices have responded to fluctuations in the U.S. dollar and Treasury yields, as well as the impact of anticipated Federal Reserve actions. It provides insight into the factors influencing gold’s movements in the market and the expectations for its future performance. The addition of expert analysis and predictions further enhances the understanding of the dynamics at play in the precious metals market.
