Gold gains ground as US yields decline

Gold prices rose in European trade for the second session as US treasury yields declined amid prospects of a reduced rate hike by the Fed next week. 

Gold is also boosted by increased haven demand amid concerns about US economic recession next year. 

Gold Prices Today

Gold prices rose 0.3% to $1,775 an ounce, after rising over 0.1% yesterday, resuming gains after a tumble from five-month highs at $1,810.

US Yields

US 10-year treasury yields fell 0.7% today for another session, in turn underpinning non-yielding assets like gold.

The decline comes as most analysts now expect the Federal Reserve to only raise interest rates by 50 basis points in December. 

Recession

CEOs of JPMorgan, Bank of America, and Goldman Sachs warned that inflation will threaten consumer demand, and that banks are preparing for deteriorating conditions in 2023.

US recession would no doubt force the Fed to slow down its pace of policy tightening even further, in turn underpinning gold futures. 

The SPDR

Gold holdings at the SPDR Gold Trust rose 2.6 tones yesterday, the first increase since November 25, to a total of 906 tones away from 903 tones, which was a January 2020 low.