Gold climbs ahead of inflation data, Powell's speech

Economies.com
2024-05-14 08:35AM UTC

Gold prices rose in European trade on Tuesday, resuming gains after a short hiatus, as US 10-year treasury yields slowed down. 

 

Investors are looking for fresh clues on this year’s interest rate cuts by the Federal Reserve, as investors await crucial US inflation data and Fed Chair Jerome Powell’s speech. 

 

Prices

 

Gold prices rose 0.4% today to $2345.99 an ounce, with a session-low at $2334. 

 

The precious metal lost over 1% on Monday, the first loss in three days away from a two-week high on Friday at $2378. 

 

US 10-year treasury yields fell by 0.4 basis points on Tuesday on track for the second loss in a row, which provides support for non-yielding assets. 

 

The developments came ahead of crucial US inflation data for April, in addition to Fed Chair Jerome Powell’s speech this week. 

 

US Rates

 

The markets are pricing in a 3.5% chance of a June Fed rate cut, and a 25% chance of a July cut, and a 63% chance of a September cut.

 

According to the Fedwatch tool, the markets expect two Fed interest rate cuts this year in September and November. 

 

US Inflation Data

 

Later today, US producer prices data will be released for April, while tomorrow, US consumer prices data is scheduled for release, and it’ll be crucial for gauging the likely path ahead of monetary policies. 

 

Powell

 

Fed Chair Jerome Powell is expected to speak in Amsterdam later today, and will take audience questions on the future of inflation and interest rates.

 

The SPDR 

 

Gold holdings at the SPDR Gold Trust remained flat yesterday at 831.93 tonnes, a week high. 

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