Gold prices dipped on Wednesday, influenced by rising U.S. Treasury yields and a stronger dollar after economic data indicated the Federal Reserve may slow down its rate cuts this year. Spot gold fell 0.2% to $2,645.64 per ounce, while U.S. gold futures decreased 0.3% to $2,658.60.
Kelvin Wong, OANDA’s senior market analyst for Asia Pacific, explained that the dollar index bounced back amid expectations for a less volatile monetary policy from the Fed, leading to some weakness in gold prices.
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The dollar strengthened, and the 10-year Treasury yield hit an eight-month high after data revealed a strong economy, with U.S. job openings rising to 8.098 million in November.
Markets now anticipate only one rate cut by the Fed in 2025, a shift from the two cuts expected in December. Investors are awaiting the U.S. nonfarm payrolls report on Friday, along with ADP employment data and minutes from the Fed’s December meeting, which could offer more insights on future policy. Analysts noted that any soft U.S. economic data this week could spark optimism for potential rate cuts in 2025.
In addition, China, the world’s leading gold consumer, increased its gold reserves for the second consecutive month in December. Meanwhile, silver held steady at $29.99 per ounce, platinum fell 0.7% to $944.43, and palladium dropped 0.6% to $920.27.
