Gold Falls Slightly, Signals the Fed Still Causing Market Tension?
Gold prices weakened in early trading on Tuesday after previously touching a six-week high. Spot gold fell around 0.4% to around $4,215 per ounce, while December gold futures fell 0.6% to around $4,247 per ounce. The main pressure came from the rise in the yield on the 10-year US Treasury bond, which approached a two-week high, reducing the appeal of non-coupon/yielding gold. Furthermore, profit-taking following the previous rally also added to selling pressure.
Although gold's movement appears sluggish today, the fundamental picture hasn't changed much. The market still anticipates a US interest rate cut, with the chance of a December rate cut estimated at around 88% according to CME FedWatch. Lower interest rates are typically positive for gold because they lower the opportunity cost of holding non-yielding assets. However, market participants remain cautious ahead of Fed Chair Jerome Powell's speech and the release of key data such as the ADP employment report and the core PCE index, which could alter Fed policy expectations.
In terms of capital flows, interest in gold remains evident. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, reported a 0.44% increase in holdings to 1,050.01 tons. Meanwhile, other precious metals traded mixed: silver fell 1.9% to around $56.88 per ounce, while platinum and palladium gained slightly. Overall, the current gold correction appears to be a technical pause amidst medium-term sentiment still supported by expectations of interest rate cuts. (az)
Source: Newsmaker.id
