Gold Prices Steady Despite Dollar and Bond Yield Rise

Gold prices maintained stability on Tuesday, resilient to a surge in the dollar and Treasury bond yields. Investors awaited insights from the Federal Reserve’s latest meeting minutes for potential clues regarding interest rate cuts.

At 0341 GMT, the spot price of gold settled at $2,018.03 per ounce, with most US markets closed on Monday for a holiday. Meanwhile, US gold futures saw a 0.3 percent increase, reaching $2,029.10 per ounce.

Dollar and Bond Yields Rise

The dollar index experienced a 0.1 percent uptick, while benchmark 10-year Treasury bond yields approached four percent. This uptrend in yields makes bullion priced in US currency less appealing to foreign investors.

Fed Meeting Minutes Awaited

Investors keenly anticipated the release of minutes from the Federal Reserve’s January monetary policy meeting, scheduled for Wednesday. Despite progress in curbing inflation in the US, San Francisco Fed President Mary Daly emphasized the need for further efforts to ensure price stability. Another Fed official cautioned that interest rate cuts could be delayed significantly.

Data Dampens Rate Cut Expectations

Last week’s US consumer and producer price data exceeded expectations, diminishing hopes for a Federal Reserve interest rate cut in March. Lower interest rates typically decrease the opportunity cost of holding gold.

Performance of Other Precious Metals

In other precious metals, platinum in spot transactions experienced a 0.6 percent decline, reaching $893.16 per ounce, while palladium dropped 0.8 percent to $946.41 per ounce. Silver also saw a 0.4 percent decrease, settling at $22.93 per ounce.