Gold rises and the dollar and yields also go up

Gold Stays Above $2,150 as Dollar Eases, Fed Remarks Await

Gold prices eased in Asian trade on Tuesday but remained above $2,150 as the US dollar retreated from multi-week highs, and gold exchange-traded funds (ETFs) logged their first inflow ahead of a series of statements from Federal Reserve officials and crucial inflation data on Friday.

Spot gold shed 0.07% to $2,170.40 per ounce, while April contract gold futures lost 0.26% to $2170.80 per ounce. The yellow metal has strengthened recently on increased expectations for a Fed interest rate cut this year.

Other precious metals were in the red, with platinum futures expiring in July dropping 0.32% to $913.55 per ounce and silver futures for May sliding 0.47% to $24.78 per ounce.

Gold Stable as Dollar Eases amid Fed Speeches, PCE Data

Keeping gold’s stability was also indications of renewed sentiment for ETFs. A report from the Royal Bank of Canada (RBC) stated that physical gold ETFs saw their first weekly inflow of 2024 at 483,000 ounces.

The data came after the US central bank last week said it still foresees trimming rates at least three times this year despite a surge in inflation.

However, the US dollar index fell from multi-week peaks of $104.50 to trade 0.22% lower at $104.24 against major peers on Tuesday, even as nine of the Fed’s 19 policymakers anticipated two or fewer.

Atlanta Fed President Raphael Bostic maintained on Monday his views of the central bank only needing one rate cut, as the country’s solid economic performance is helping the Fed stay cautious about reducing interest rates.

Several Fed speeches, including those by Fed Governor Christopher Waller and Chairman Jerome Powell, are due this week, and will conclude with the release of the central bank’s preferred inflation measure – the US personal consumption expenditures price index (PCE) data – on Friday.

The headline PCE for February is seen showing a rise of 0.4% month-over-month (MoM), while the core PCE is estimated at a 0.3% MoM increase. The CME FedWatch tool presented a 70% probability of a June rate cut compared to the previous 65% chance last week.

The focus is currently on the US’s consumer confidence, durable goods orders, and the Federal Housing Finance Agency’s (FHFA) house price index, which are all set to be published later Tuesday.

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