Gold prices experienced a slight pullback Tuesday after reaching a six-week high,as investors reacted to increased U.S. Treasury yields and a period of profit-taking following recent gains.
The market remains sensitive to signals regarding the Federal Reserve’s future monetary policy, wiht traders assessing the likelihood of interest rate cuts in the coming months.
Despite the dip, analysts suggest the basic factors supporting gold – namely expectations for eventual rate reductions – remain largely intact.
other precious metals also faced downward pressure in trading Tuesday.
Gold prices retreated on Tuesday, following a six-week high, as rising U.S. Treasury yields and profit-taking weighed on the market. Investors are closely monitoring upcoming U.S. economic data for clues about the Federal Reserve’s monetary policy path, adding to the cautious trading environment.
Gold for delivery fell 0.3% to $2,188.71 per ounce, while December gold futures declined 0.6% to $2,198.70.
“Gold had a weaker session on Tuesday, but the underlying picture remains unchanged – it’s a picture that includes expectations of U.S. interest rate cuts, which should be supportive for gold in terms of yield,” said KCM Trade’s chief market analyst, Tim Waterer. He added, “Markets are acting cautiously, as Federal Reserve Chair Jerome Powell doesn’t appear inclined to ease policy as much as some of his colleagues.”
Powell did not comment on the economy or monetary policy in a speech delivered late Monday at Stanford University.
The CME Group’s FedWatch tool indicates that markets are pricing in an 88% probability of the Federal Reserve cutting interest rates at its December meeting. Lower interest rates typically boost the appeal of non-yielding assets like gold.
Kevin Hassett, a White House economic advisor, stated on Sunday that he would be happy to take on the role of Federal Reserve Chair if nominated.
Gold traditionally benefits from a low-interest-rate environment.
Other precious metals also saw declines. Silver fell 1.3% to $25.24 per ounce, platinum dropped 0.9% to $1,643.10, and palladium decreased 0.4% to $1,419.50.
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