Gold fell as US yields firmed and dovish Fed expectations provided support

20 Nov 2023 , 10:21 AM

After reaching a two-week high in the previous session, gold prices slightly increased in early Asian hours on Monday due to a minor increase in U.S. Treasury yields; nevertheless, bullion was supported by views that U.S. rates had peaked.

After increasing 2.2% the previous week, spot gold was down 0.2% at $1,975.80 per ounce. The price of US gold futures fell 0.3% to $1,978.50.

Typical The yield on the US 10-year Treasury increased to 4.4647% from a two-month low, which made non-interest bearing gold less appealing.

Market players revised their expectations for future Federal Reserve action in response to data suggesting a slowing US labour market and a weaker-than-expected consumer inflation report last week.

The CME FedWatch tool indicates that traders currently mostly anticipate that the Fed will maintain current interest rates at its policy meeting on December 12–13.

While this was going on, gold became more affordable for holders of other currencies as the dollar sat close to a two-month low against its competitors.

The largest exchange-traded fund backed by gold in the world, SPDR Gold Trust, reported that its holdings increased by 1.49% to 883.43 tonnes on Friday from 870.45 tonnes on Thursday.

For further details on the trajectory of interest rates, investors are now anticipating the minutes from the most recent meeting of the US central bank.

Monday saw a poor start for Asian markets in a week that will be truncated by holidays. Given that market values have already factored in aggressive global policy easing for next year, they appear a little stretched.

Despite intense fighting in Gaza, U.S. and Israeli officials said that an agreement to release some of the hostages held in the beleaguered enclave was getting closer in the Middle East.

Spot silver increased 0.6% to an ounce of $23.83, while platinum remained unchanged at $892.58. Palladium dropped 0.2% to an ounce for $1,035.77.

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