Gold falls with higher yields as traders eye Federal Reserve policy

 

Bloomberg

Gold falls the most since October as Treasury yields and the dollar rise, with traders assessing fresh US economic data for cues on the Federal Reserve’s rate policy along with China’s relaxation of its Covid-Zero policies.
Stronger-than-expected US services data from November boosted chances that the Fed will keep interest rates higher for longer, which hurts bullion since it pays no interest. Treasury yields and the dollar extended gains after the Institute for Supply Management data, sending bullion down as much as 1.6%.
The precious metal had been hurt by the US central bank’s aggressive rate hikes this year, although it rose above the key $1,800 level last week amid signs the Fed might be less hawkish.
“We see signs of buying exhaustion in gold,” said Daniel Ghali, senior commodity strategist at TD Securities. A “notable consolidation in prices will be needed” before commodity trading trend followers spark renewed outflows, he said.
Spot gold falls 1.7% to $1,766.73 an ounce as of 2:25 pm in New York. Bullion for December delivery dropped 1.6% to settle at $1,781.30 on the Comex. The Bloomberg Dollar Spot Index strengthened 0.7% after earlier falling as much as 0.4%, while 10-year Treasury yields advance.
Silver, platinum and palladium dropped.

Leave a Reply

Send this to a friend