Gold increases as traders expect Powell's comments and lower yields

9 Nov 2023 , 10:09 AM

A decrease in US Treasury yields helped drive up gold prices in early Asian trading on Thursday, and investors were waiting for U.S. Federal Reserve Chair Jerome Powell’s remarks to provide further hints about interest rates.

Spot gold was up 0.2% at $1,953.74 an ounce, having hit its lowest level since Wednesday, October 19. US gold futures increased by 0.1% to $1,959.10.

Typically The yield on the US 10-year Treasury stayed close to its lowest point in almost a month. The opportunity cost of owning gold that doesn’t yield interest is decreased by lower bond yields.

After three days of advances, the dollar index continued to hold firm against its competitors.

Powell gave prepared remarks on Wednesday at a U.S. central bank statistics conference; he made no mention of monetary policy or the economic forecast. On Thursday, he has another conference speech set.

When discussing the Fed’s upcoming decision, a number of Fed officials this week spoke in a measured manner, emphasizing that they would be considering more economic data as well as the implications of rising long-term bond rates.

According to the CME FedWatch Tool, futures price in an 18% possibility that rate reduction might occur as early as March, but they also hint to a roughly 14% chance of another boost by January.

Interest rates that are lower make zero-yield bullion more appealing.

According to ECB policymakers, additional progress in reducing inflationary pressures is required, and businesses and governments must work together to avoid further policy tightening.

The largest exchange-traded fund backed by gold in the world, SPDR Gold Trust, said that its holdings decreased by 0.03% to 867.28 tonnes on Wednesday.

Platinum increased 0.3% to $868.82 per ounce, while spot silver decreased 0.4% to $22.61. Palladium was down 0.3% at $1,047.16, about where it was when it peaked in 2018.

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