Gold Retreats as Dollar, Yields Firm Ahead of Fed Verdict
Gold eased on Tuesday after climbing to an all-time high in the previous session as dollar and Treasury yields firmed, while traders positioned themselves for a potential U.S. interest rate cut decision by the Federal Reserve this week.
Spot gold fell 0.5% to $2,569.43 per ounce after scaling an all-time high of $2,589.59 on Monday.
U.S. gold futures settled 0.6% lower at $2,592.40.
The spotlight in the financial realm is on the Fed's two-day policy meeting that concludes on Wednesday. Markets are now pricing in a 63% chance of a 50-basis-point cut versus 34% a week ago, according to the CME FedWatch tool.
The financial markets have priced in a bigger chance that the Fed will move more aggressively. This would be the Fed's first rate cut since 2020.
Goldman Sachs on Monday said they see some tactical downside to gold prices under their economists' base case of a 25 bps Fed cut on Wednesday and reiterated their long gold trading recommendation and price target of $2,700 per ounce by early 2025.
Lower interest rates reduce the opportunity cost of holding the non-yielding bullion.
Source : Reuters
