September 14, 2023
Gold-Rates International

Gold Ekes Out Gains In Thin Trade As US Yields Slip

On Thursday, the price of gold inched higher as a result of a slight pullback in the yields on US Treasury securities. However, bullion prices remained contained within a narrow range as market participants awaited new indications on the plans of the Federal Reserve to raise interest rates.

After falling by 1% in the previous session, spot gold was trading higher at $1,805.26 per ounce as of 07:54 GMT, a gain of 0.1%. The price of gold futures in the US fell by 0.2%, reaching $1,813.00. Benchmark The yield on the US 10-year Treasury note fell after reaching a high point for the first time in six weeks in the previous session.

Traders will keep a close eye on the weekly jobless claim numbers for the United States, which are expected to be released at 1330 GMT. These numbers are expected to likely have an impact on the Fed’s strategy to hike interest rates. “Data on jobless people will be very important.

According to Ajay Kedia, director at Kedia Commodities in Mumbai, if it shows an increase in claims, then it should weaken the dollar and support gold. The bullion was buffeted by rapid rate hikes from major central banks for the majority of this year, which contributed to the bullion being under pressure.

On the other hand, prices have increased by nearly $200 from a more than two-year low that was reached in September in the hopes that the US central bank might slow down its pace of increasing interest rates.

Gold at new highs 

While Fed Chair Jerome Powell has underlined the need to maintain rates elevated for a while to battle inflation, the Fed only increased interest rates by 50 basis points (bps) in December after four consecutive rises of 75 bps each.

The anti-inflationary attractiveness of gold is diminished by higher rates, and holding the asset has a higher opportunity cost because gold doesn’t pay interest.

Gold became more expensive for holders of other currencies when the dollar’s value increased against its competitors by 0.1%.

“Gold has already factored in rate increases through 2022. Geopolitical unrest, economic difficulties, and central bank purchases will all support gold well in 2023, according to Kedia.

“Gold exchange-traded funds (ETFs) are also beginning to climb.” Palladium was down 0.2% at $1,781.09, platinum was down 0.2% at $1,006.01, and spot silver was up 0.1% at $23.55.

Leave a Reply

Your email address will not be published. Required fields are marked *