Gold Prices Edge Higher on Retreating Treasury Yields
Gold edged higher on Tuesday lifted by retreating Treasury yields, while investors cautiously awaited more data that could offer fresh clues on the Federal Reserve’s monetary easing cycle.
Spot gold GOLD rose 0.5% to $2,663.83 per ounce at 2:00 p.m. ET (1800 GMT). U.S. gold futures GOLD settled 0.5% higher at $2,678.9.
Factors Affecting Gold Prices
The Benchmark 10-year note yields US10Y slipped following a soft reading of manufacturing activity in New York State, making non-yielding gold more attractive, while the dollar DXY hovered near its highest in more than two months. This movement in yields and the dollar is providing support to the gold market, indicating potential stability in the near term.
Traders are currently anticipating a 25-basis-point cut in November, with a 90% probability, according to the CME FedWatch tool. This expectation is influencing market sentiment and contributing to the upward trend in gold prices.
Upcoming Data Releases
Markets will closely monitor upcoming U.S. retail sales, industrial production data, and weekly jobless claims later this week, as these indicators can provide insight into the health of the economy and potential monetary policy decisions by the Federal Reserve. The release of this data could impact gold prices in the coming days.
Geopolitical Risks and Gold Price Forecast
Gold, which typically performs well in times of political and economic uncertainties, may see a shift in support if geopolitical risks decrease. According to Commerzbank, if reports are accurate and Israel refrains from targeting Iran’s oil and nuclear sites in an expected retaliatory strike, geopolitical risks could diminish, leading to a potential decline in gold prices. Commerzbank also predicts slight downside risks for the gold price, estimating it to be $2,600 by the end of the year.
Other Precious Metals Performance
Spot silver XAGUSD1! rose 1% to $31.49 per ounce, while platinum PL1! fell 0.5% to $988.45. Palladium XPDUSD1! experienced a 1.6% decrease, reaching $1,012.98.
