Gold Prices Steady Amid Falling US Bond Yields
Gold prices attracted some dip buyers during the Asian session on Tuesday and reversed part of the previous day’s decline from near one-month highs touched last week. Reports that US President-elect Donald Trump’s top economic adviser is considering a gradual tariff hike to prevent a sudden spike in inflation triggered a modest pullback in the US Treasury bond yields and benefitted the non-yielding yellow metal. Moreover, the uptick lacked any obvious catalyst and is likely to remain capped amid expectations of an aggressive Federal Reserve (Fed).
The upbeat US Nonfarm Payrolls (NFP) report released on Friday strengthened bets for a slower pace of interest rate cuts by the US central bank this year. This, in turn, helped the US Dollar (USD) to stall its profit-taking slide from two-year tops touched on Monday and should act as a tailwind for the US Treasury yields. Meanwhile, easing concerns about disruptive trade tariffs under Trump 2.0 boosted investor confidence, further warranting some caution before placing fresh bullish bets around Gold prices. Traders now look to the US Producer Price Index (PPI) for a fresh impetus.
Source: FXStreet
