Gold prices rose during these moments of trading, today, Tuesday, after touching the highest level in six months during yesterday’s trading, as expectations of an end to the cycle of raising US interest rates on the dollar and bond yields were kept under control.
The gold sparkles
“Lower bond yields and bets that the Fed might cut rates sooner than originally thought certainly helped gold shine,” said Matt Simpson, chief analyst at City Index.
The dollar index touched its lowest levels since late August against its rivals, making gold less expensive for holders of other currencies. The yield on the 10-year Treasury note hovered near a two-month low of 4.3630%.
Recent data showing signs of slowing US inflation has reinforced expectations that the Fed may begin easing monetary conditions sooner than expected, with the market now eyeing data on personal consumption expenditures (PCE) - the Fed's preferred measure of inflation - Thursday.
Simpson added: It is now a matter of whether inflation will continue to decline at a rapid enough pace to justify bets on lowering interest rates. My bet is that it won't happen, and that gold might find that a bump in the road, and if it does, support will be at the 1990 or 1960 level as there was a lot of trading activity in that area.
Traders widely expect the US central bank to hold interest rates in December, while anticipating a roughly 50-50 chance of easing in May next year, the Investing Saudi Arabia Fed rate tracker shows.
Lower interest rates reduce the opportunity cost of holding non-interest bearing bullion.
Investors are also focused on revised US third-quarter GDP numbers, due on Wednesday.
Meanwhile, net gold imports into China, the largest consumer, via Hong Kong fell for the second straight month in October, as an erratic economic recovery weighed on demand in the key bullion market, data showed on Monday.
Gold at settlement yesterday
Gold prices rose at the settlement of trading yesterday, Monday, supported by a decline in US bond yields after the release of economic data that strengthened expectations of the end of the monetary tightening cycle by the Federal Reserve.
According to US Census Bureau data, new home sales fell by 5.6% from the downwardly revised September rate of 719,000 units, recording an annual pace of 679,000 units during October, compared to expectations of 724,000 units.
Upon settlement, gold futures prices for December delivery rose by 0.45%, or $9.4, at $2,012.4 per ounce, which is the highest level at the end of the session since the nineteenth of last July, after touching $2,018.9 during trading.
Gold and dollar now
Gold futures rose 0.14% to $2,015 an ounce.
Meanwhile, spot gold contracts rose by 0.04% to $2,015 per ounce, after recording its highest levels since May 16.
On the other hand, the dollar index rose by 0.04% to 103.147 points.
other metals
The price of silver in spot transactions stabilized at $24.62 per ounce, and platinum rose 0.3 percent to $921.49. Palladium fell 0.6 percent to $1,064.15 an ounce.
