Gold backs off record highs as dollar rebounds

Gold prices fell in European trade on Wednesday on track for the second loss in a row away from recent record highs on profit-taking, while the dollar rebounds. 

Prices are also pressured by higher US 10-year treasury yields as traders await more clues on the Federal Reserve’s future interest rate decisions. 

Prices

Gold prices fell 0.3% today to $2905 an ounce, with a session-high at $2930.

On Tuesday, gold lost 1.9%, the heftiest loss in two weeks on profit-taking away from a record high at $2956.

The Dollar

The dollar index rose 0.25% on Wednesday against a basket of major rivals, moving away from two-month lows.

US Yields

US 10-year treasury yields rose 0.7% on Wednesday away from 11-week lows at 4.283%, on track for the first profit in six sessions.

As Trump prepares to enforce his tariffs on Mexico and Canada next week, inflationary pressures are expected to mount on the Federal Reserve, which would likely lead to interest rates being held at current levels for an extended duration this year.

US Rates

According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in March stood at 2.5%.

Now traders await GDP growth and personal spending data this week, in addition to a host of remarks by Fed officials.

SPDR

Gold holdings at the SPDR Gold Trust rose by 0.29 tons yesterday to a total of 907.82 tons, the highest since August 2023.