Gold is hovering near an all-time high as dollar consolidates

Gold prices on Tuesday hovered below the record level they reached in the previous session, with the dollar and Treasury bond yields remaining steady after robust US data raised doubts about whether the Federal Reserve (US central bank) would cut interest rates three times this year.

By 0624 GMT, gold rose 0.2 percent in spot trading to $2,253.94 per ounce, staying below its all-time high of $2,265.49 reached on Monday. US gold futures increased by 0.8 percent to $2,274.60 an ounce.

Tim Waterer, chief market analyst at KCM Trade, noted, “Gold hit a new record price, and with this high level, there were also some signs of excessive pricing, which led to a modest decline. But the recent declines in gold were minor in nature due to… Potential buyers are waiting on the sidelines for better chances of returning.”

Gold’s upward momentum was tempered by the dollar’s rise to its highest level in four and a half months, while benchmark ten-year US Treasury bond yields traded near their highest levels in two weeks after data indicated that the US manufacturing sector expanded for the first time in a year and a half during March.

Federal Reserve Chairman Jerome Powell stated on Friday that the latest inflation data did not affect the central bank’s fundamental outlook, but emphasized that the strength of the economy “means we do not need to rush to cut.”

Gold typically sees gains when interest rates are lowered as it reduces the opportunity cost of holding bullion.

In other precious metals, silver rose by 1.1 percent to $25.37 per ounce, platinum increased by 0.6 percent to $907.45, and palladium rose by 1.2 percent to $1,008.44.