Gold scales two-week peak as market focus turns to Fed meeting

Products You May Like

Gold prices climbed to a two-week high on Tuesday, supported by a softer dollar and lower Treasury yields while focus turned to the Federal Reserve‘s policy meeting for insight into how soon it will cut interest rates this year.

Spot gold was up 0.8% at $2,047.96 per ounce by 09:25 a.m.(1425 GMT), after hitting its highest since Jan. 16 earlier in the session. U.S. gold futures rose 1.1% to $2,047.50.

“A big part of gold moving is rates have been coming off and the dollar is in the red, but we are seeing the market elevated due to the anticipation for the Fed interest rate decision on Wednesday,” said Daniel Pavilonis, senior market strategist at RJO Futures.

The dollar index fell 0.2%, making gold more appealing to other currency holders. The benchmark 10-year Treasury yields hit a two-week low.

Lower interest rates decrease the opportunity cost of holding bullion.

The Fed’s policy decision is due on Wednesday, having made a dovish turn in the December meeting. Markets are widely expecting the U.S. central bank to leave rates unchanged at the end of the two-day meeting. Fed wants to have a steady market so we may not see that many rate cuts, and Powell is going to be neutral and talk about the possibility of lowering interest rates, Pavilonis added. Last week data showed moderate growth in U.S. prices in December, keeping annual inflation below 3% for a third consecutive month and potentially allowing the Fed to begin cutting interest rates this year.

A Reuters poll showed on Monday that uncertainty about the economy and U.S. interest rate cuts could drive record gold prices in 2024.

Spot silver rose 0.3% to $23.28 per ounce, hitting its highest level since Jan.15 earlier in the session. Spot platinum fell 0.2% to $925.26 an ounce and palladium lost 0.2% to $981.21.

(What’s moving Sensex and Nifty Track latest market news, stock tips and expert advice, Budget 2024 News Budget 2024 Live Updates on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

Download The Economic Times News App to get Daily Market Updates & Live Business News.

Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price