Gold Holds Drop as Fed Rate-Cut Bets Soften, Haven Demand Ebbs
Gold steadied after falling more than 2% Wednesday on signs there will be fewer Federal Reserve rate cuts than previously anticipated, and as easing US-China tensions sapped haven demand.
Bullion traded above $3,182 an ounce on Thursday, near the lowest level in more than a month. Yields on US Treasuries climbed on expectations the Fed will lower borrowing costs later than thought due to an improving economic outlook following the US-China trade truce. Higher yields and rates tend to be negative for non-interest bearing gold.
Continued progress in US-led trade talks also added to bearish headwinds for the precious metal, with China suspending curbs on exports of rare earths and other goods and technologies on Wednesday. The detente between the world’s two largest economies has reduced gold’s haven appeal and led to a sharp rebound in risk assets this week.
Gold is still up more than 20% this year, however, with prices peaking at a record above $3,500 an ounce in April. Investors had feared trade tensions stemming from Trump’s tariffs could spur faster inflation and a slowdown in growth, or even a recession.
Spot gold rose 0.2% to $3,182.85 an ounce as of 8:04 a.m. in Singapore. The Bloomberg Dollar Spot Index was steady. Silver and platinum were steady, while palladium edged higher.
Source: Bloomberg
