Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Gold treads water as high yields weigh, Powell talk in focus

Published 07/02/2023, 01:30
Updated 07/02/2023, 01:30
© Reuters.

© Reuters.

By Ambar Warrick

Investing.com -- Gold prices steadied at a near one-month low on Tuesday amid continued pressure from strength in the dollar and Treasury yields, with focus now turning to economic cues from a talk by Federal Reserve Chair Jerome Powell later in the day.

The yellow metal had a muted session on Monday after suffering its worst weekly decline in seven months, as stronger-than-expected U.S. jobs data saw markets broadly shift their expectations for interest rate hikes by the Fed.

A recovery in the dollar and Treasury yields pressured most non-yielding assets, with gold - which marked a strong run over the past three months - bearing the brunt of selling pressure.

Spot gold was flat at $1,868.49 an ounce, while gold futures rose 0.1% to $1,881.20 an ounce by 19:00 ET (00:00 GMT). Both instruments plummeted over 3% last week.

Focus now turns to a discussion with Fed Chair Jerome Powell at the Economic Club of Washington D.C. later in the day. Any comments on inflation and monetary policy will be closely watched, following Friday’s much hotter-than-expected nonfarm payrolls reading.

The Fed had last week raised interest rates as expected and signaled that it will keep doing so in the near-term, as it continues to move against inflation. While U.S. inflation has eased substantially in recent months, it is still well above the central bank’s annual target.

The strong nonfarm payrolls data also saw markets toning down their expectations for a dovish pivot by the Fed this year, amid concerns that a strong jobs market will keep inflation elevated.

Other precious metals advanced slightly on Tuesday. Platinum futures rose 0.2% to $979.95 an ounce, while silver futures rose 0.3% to $22.310 an ounce.

Among industrial metals, copper prices rose slightly after tumbling over the past five sessions. The red metal has given up a bulk of recent gains, and is now close to dropping below the key $4 a pound level amid uncertainty over an economic recovery in major importer China.

High-grade copper futures rose 0.2% to $4.0442 a pound.

Fears of a global recession have also weighed heavily on the industrial metal, especially as interest rates keep rising and inflation remains relatively elevated.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.