Gold price falls 1% amid rising global yields, dollar
Gold prices fell by 1% on Monday amid an increase in global bond yields and continued strength in the dollar, as traders weighed prospects for US interest rate cuts.
Spot gold was down to $2,662.52 per ounce by 12:15 p.m. ET, but is still trading near its highest in a month. US gold futures declined 1.3% to 2,680 an ounce in New York.
The decline follows four straight days of gains in the lead-up to last week’s US jobs report, which soared past expectations and led major banks to pare back forecasts for additional interest rate cuts.
The strong jobs report lifted both bond yields and the dollar, which in turn dimmed the appeal of gold. Ten-year Treasury yields touched a 14-month high Monday, while the dollar index hit its highest since November 2022.
“We had a better-than-expected US job report which strengthened the dollar and the Treasury yields…(Gold’s) move lower here is some follow through on the stronger-than-expected report,” said Bob Haberkorn, senior market strategist at RJO Futures.
There is also some profit-taking after gold had a great week last week, Haberkorn added.
Investors now await US inflation data, weekly jobless claims and retail sales this week for further insights into the economy and the Federal Reserve’s policy plans.
“Should CPI inflation data on Wednesday show signs of persisting, any calls for a rate cut in the first half of the year will be firmly dismissed again,” Fawad Razaqzada, market analyst at City Index and FOREX.com, wrote in a note.
Currently, markets expect 25 basis points cut this year, compared with expectations of 40 basis points last week, according to Reuters.
(With files from Bloomberg and Reuters)