Gold hits new record highs despite dollar's strength
Gold prices rose on Monday even as the dollar gained ground against most major rivals, while US yields rose as well.
US 10-year treasury yields rose by 9 basis points to over 4.17%, hitting late July highs.
Otherwise, Dallas Fed President Lorry Loan said she’s confident of the economy’s stability and strength, but called for caution nonetheless and for gradual policy easing.
The dollar index rose 0.5% as of 19:20 GMT to 103.9, with a session-high at 104.02, and a low at 103.4.
Gold spot prices rose 0.1% as of 19:20 GMT to $2732 an ounce.
Bitcoin gives up three-month high on profit-taking
Bitcoin fell on Monday away from three-month highs that were scaled earlier as US Republican candidate for the presidency Donald Trump advanced in opinion polls, with the current decline due to profit-taking.
US 10-year treasury yields rose as well, in turn hurting risk appetite in the markets as investors await more clues on the Fed’s interest rate cuts.
The Price
Bitcoin fell 2.4% at Bitstamp today to $67,378, after hitting July 29 highs at $69487.
On Sunday, bitcoin rose 0.95%, while rising 10% last week, the second such weekly profit in a row on hopes for improving Chinese demand.
Crypto Market Value
The market value of cryptocurrencies fell by $15 billion to a total of $2.470 trillion as both bitcoin and ethereum sustained losses.
Trump
Recent US presidential election polls showed Donald Trump as the frontrunner.
Trump is viewed as more supportive of cryptocurrencies and more lenient with their regulations.
US Yields
US 10-year treasury yields surged 1.4% on Monday to a three-month high at 4.152%, hurting risk appetite.
According to the Fedwatch tool, the odds of a 0.25% US interest rate cut at the November Fed meeting stood at 92%, with an 8% chance of no change in interest rates.
US dollar resumes gains near 2-1/5 month high
The US dollar rose in European trade on Monday against a basket of major rivals, resuming the gains and approaching a 2-⅕ month high once more.
Investors are waiting for important remarks by several Fed officials to gauge the likelihood of an interest rate cut in November.
The Index
The dollar index rose 0.2% today to 103.66, with a session-high at 103.47.
The index lost 0.3% on Friday, the first loss in the last eight days, on profit-taking away from a 2-⅕ month high at 103.87.
The index closed up 0.5% last week, marking the third weekly profit in a row.
Bullish Outlook
As European and UK inflation fell below the 2% targets in September, the odds of interest rate cuts by both the European Central Bank and the Bank of England rallied.
As the gap between US interest rates and yields widen with the eurozone and Britain, the dollar continues to gain dominance over the euro and the pound.
US Rates
According to the Fedwatch tool, the odds of a 0.25% US interest rate cut at the November Fed meeting stood at 92%, with an 8% chance of no change in interest rates.
Silver climbs above $32 for first time since 2012 on retail demand
Silver prices rose in European trade on Monday on track for the first profit in a row, while trading above $34 an ounce for the first time since 2012 on strong retail demand.
Prices are also boosted by hopes of improving demand in China as authorities take new measures to boost the economy.
The Price
Silver prices rose 1.2% today to $34.13 an ounce, with a session-low at $33.53.
On Friday, silver rose 6.4%, the fourth profit in a row, and the largest since May 17 as most precious metals rallied.
The white metal rallied 6.9% last week, marking the fifth weekly profit in six as global central banks initiate a new cycle of policy easing.
Retail Demand
Retailers are seeking financial assets to guard against ongoing changes in global central banks policies towards more monetary easing, with silver becoming an attractive low-cost option.
Silver remains far from its true value compared to gold, which is trading near record highs.
Gold rallied to a fresh record high on October 21 at $2738 an ounce, while silver is far from its record high scaled in April 2011 at $49.78.
Chinese Demand
Chinese authorities recently took more aggressive monetary measures to boost the economy, which are expected to reflect on actual demand on silver and other metals.
The People’s Bank of China decided to cut one-year interest rates by 25 basis points to 3.10%, passing estimates of 0.2% cut.
Five-year rates, which govern mortgages, also fell by 25 basis points to 3.60%.