Gold rose Tuesday, bouncing above the key $ 1,800 level at one point, bolstered by a pullback in U.S. bond yields as investors watched the minutes of the latest Federal Reserve policy meeting to gauge the trajectory. of interest rates.
Spot gold rose 0.2% to $ 1,794.37 an ounce at 2:13 pm EDT (1813 GMT), after jumping to its highest since June 17 at $ 1,814.78. US gold futures closed 0.6% higher at $ 1,794.2.
Benchmark U.S. Treasury yields hit a nearly two-week low, boosting gold’s appeal as it tends to lower the opportunity cost of gold.
“What we’ve seen in recent days is that central banks are scrapping the idea of raising interest rates prematurely,” said Fawad Razaqzada, an analyst at ThinkMarkets.
“Investors are realizing that monetary policy will remain historically very lax and that is one of the reasons we are seeing bond yields fall, which is helping to stabilize gold prices after a strong fall in June, “Razaqzada said.
The focus is on the minutes of the latest Fed meeting, scheduled for Wednesday, after an aggressive bow from the US central bank last month, in which policy makers projected a start of rate hikes. in 2023, which drove gold back below $ 1,800.
Gold regained some balance after Friday’s data showed the U.S. unemployment rate rose.
“We believe there is still temper in precious metals as inflation should prove temporary, which means that market prices for Fed policy are too aggressive,” TD Securities said in a note.
“With gold already managing to maintain its uptrend, this scenario could finally catalyze a return of institutional interest that could cause prices to remain firm above $ 1,900 / oz.”
In other metals, silver fell 1.3% to $ 26.10, having risen to its highest level since June 17 at $ 26.76 an ounce.
Platinum was down 1.1% to $ 1,085.53, and palladium was down approximately 0.6% to $ 2,797.74. (Reporting by Swati Verma and Eileen Soreng in Bengaluru Edited by Richard Chang and Matthew Lewis)