Gold price retreats amid risk aversion

Gold prices have fallen by 0.90% in the mid-North American session on Tuesday, amid risk-off sentiment and falling US Treasury bond yields. The latest tranche of US economic data shows the economy is slowing down, warranting lower interest rates. However, the Gold Index, XAU/USD, trades with losses and exchanges hands at $2328.

The precious metal has fallen below $2350 a troy ounce as commodities plunge across the board. Oil prices were under heavy pressure earlier amidst fears that the global economy might grow at a slower pace, which could dent demand for crude. US Treasury yields, which usually correlate inversely to Gold prices, were also down seven basis points, as depicted by the US 10-year T-note yield. Contrarily, the Greenback is trading with marginal gains of 0.04%, as depicted by the US Dollar Index (DXY). The DXY tracks the greenback against a basket of six currencies and is up at 104.08.

The US economic docket featured the release of April’s JOLTS data and Durable Goods Orders, which showcased that the economy remains resilient yet weak amid higher borrowing costs set by the US Federal Reserve. Following the data release, the December 2024 fed funds rate futures contract showed that most traders expect at least 36 basis points of rate cuts via the Chicago Board of Trade (CBOT).

Tuesday’s US economic docket featured the US JOLTs Job Openings report, which decreased from 8.355 million to 8.059 million in April, falling short of the estimated 8.34 million. US Durable Goods Orders rose by 0.6% month-over-month in April, which is below both the estimates and the previous reading of 0.7%.