2024-04-17T05:52:13+00:00
Shafaq News/ Gold prices were steady on Wednesday after rallying to record highs last week, as safe-haven demand fuelled by geopolitical risks in the Middle East partially offset pressure from higher U.S. dollar and Treasury yields.
Spot gold held its ground at $2,381.68 per ounce, as of 0337 GMT, after hitting an all-time high of $2,431.29 on Friday. U.S. gold futures fell 0.4% at $2,397.70.
The dollar held steady near a five-month peak, making the greenback-priced bullion less attractive for other currency holders. Benchmark U.S. 10-year Treasury yields were at 4.6591%, hovering near a five-month high hit in the previous session.
“Gold prices have been displaying resilience in the face of higher Treasury yields and a stronger U.S. dollar, while finding some support in safe-haven flows in light of brewing geopolitical risks, with market participants still on edge for Israel’s response to Iran’s attacks,” said IG market strategist Yeap Jun Rong.
Any escalation in geopolitical tensions could potentially pave the way for prices to retest its all-time high levels, Jun Rong said.
Top U.S. central bank officials, including Federal Reserve Chair Jerome Powell, backed away from providing any guidance on when interest rates may be cut, saying instead that monetary policy needs to be restrictive for longer.
Data out of the U.S. has stirred questions on the prospects of rate cuts this year, with several global brokerages having pushed back their expectations of the U.S. Federal Reserve starting to lower interest rates to September from June.
Market is pricing in a 68% chance of a rate cut in September, according to the CME FedWatch Tool.
Lower interest rates boost the appeal of holding non-yielding bullion.
Spot silver rose 0.3% to $28.16 per ounce, platinum fell 0.3% at $953.75, and palladium was up 0.4% at $1,017.58.
### Geopolitical Risks and Gold Prices
The article discusses how geopolitical risks in the Middle East have impacted gold prices. Despite pressure from a strong U.S. dollar and Treasury yields, safe-haven demand has kept gold prices steady. This trend highlights the market’s sensitivity to geopolitical unrest.
### Impact of Interest Rates on Gold
The mention of central bank officials refraining from discussing rate cuts sheds light on how monetary policy decisions affect gold prices. Uncertainty surrounding rate cuts and market expectations play a significant role in determining the appeal of non-yielding bullion as an investment.
### Market Dynamics and Precious Metals
The article also covers the performance of other precious metals like silver, platinum, and palladium. Understanding the dynamics of these metals alongside gold provides a comprehensive view of the broader market trends and investor sentiment.
