Gold prices languished near their lowest level in nearly two weeks on Tuesday, weighed down by a firm dollar and elevated Treasury yields, as traders tempered expectations that the US Federal Reserve would aggressively cut interest rates this year.
Gold holds steady as traders eye jobs
Fundamentals
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Spot gold was flat at $2,025.24 per ounce, as of 0216 GMT, after hitting its lowest since Jan. 25 in the previous session.
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US gold futures edged 0.1% lower to $2,041.30 per ounce.
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Data released on Monday showed that the US services sector growth picked up in January as new orders increased and employment rebounded, but suppliers appeared to fall behind, resulting in a measure of input prices rising to an 11-month high.
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Two Fed officials said that the US central bank did not need to be overly concerned by recent higher-than-expected economic growth and employment figures and could take time before deciding to reduce interest rates, echoing Powell’s prudence in determining when to cut rates.
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The dollar index hovered near a three-month high, making bullion more expensive for other currency holders, while yields on benchmark 10-year Treasury held above 4%.
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Asian shares edged up thanks to a bounce in battered Chinese markets, although investors were cautious after a slide on Wall Street amid diminishing expectations of a near-term Fed rate cut, which in turn underpinned the dollar.
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Friday’s blowout US jobs report dashed prospects of early Fed rate cuts. Traders have repriced their bets to four quarter-point cuts for 2024, down from six last Monday, according to LSEG’s interest rate probability app IRPR.
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Investors are awaiting remarks from a host of Fed speakers on Tuesday and the rest of this week for further clues on the timing of rate cuts.
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Spot silver fell 0.1% to $22.33 per ounce, while palladium rose 0.4% to $952.44 and platinum edged 0.2% higher to $898.53.
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