Gold gains support from a dip in US dollar, bond yields

Tue Aug 29 2023

Gold prices gained on Tuesday as the dollar and Treasury yields retreated from recent highs ahead of crucial U.S. inflation and jobs data this week that could define the outlook for interest rates.

FUNDAMENTALS

* Spot gold was up 0.1% at $1,921.69 per ounce by 0113 GMT, having hit its highest since Aug. 10 on Monday. U.S. gold futures rose 0.1% to $1,949.30.

* The U.S. dollar dipped against a basket of major currencies, while benchmark U.S. 10-year Treasury yields moved further away from their highest levels since 2007 hit last week.

* A weaker dollar tends to make gold, which yields no interest, less expensive for other currency holders.

* Among a string of economic data scheduled to be released this week, focus would be on the Federal Reserve's preferred inflation measure, the U.S. PCE price index due on Thursday, and the non-farm payrolls report due on Friday.

* Record levels of government debt, geopolitical tensions that threaten to split the global trading system, and the likely persistence of weak productivity gains may saddle the world with a slow-growth future that stunts development in some countries even before it starts.

* European Central Bank policymaker Robert Holzmann sees a case for raising interest rates further at its next meeting in September if there are no big surprises in inflation data before then, he told Bloomberg News in an interview on Monday.

* Japan's jobless rate rose to 2.7% in July from the previous month, government data showed.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.3% to 886.64 metric tons on Monday.

* Elsewhere, spot silver fell 0.2% to $24.22 per ounce and platinum steadied at $964.90, having opened at its highest level in a month. Palladium lost 0.6% to $1,247.36.

Source: https://economictimes.indiatimes.com