Gold Moves into Positive Territory Thanks to Slowing US Yields

Gold Moves into Positive Territory Thanks to Slowing US Yields

• The market awaits important economic data from the United States.
• Expectations of improved actual demand in India after the reduction of import duties.

Gold prices rose in the European market on Wednesday, continuing their gains for the second consecutive day, thanks to buying activities around the $2,400 per ounce level, amid a slowdown in the yield on US 10-year Treasury bonds.

Investors are eagerly awaiting the release of important economic data from the United States this week to gain more clues about the potential timeline for the Federal Reserve's monetary policy easing.

Price Outlook

• Gold prices today: Gold prices rose by 0.4% to $2,419.26, from the opening level of $2,409.77, and recorded the lowest level at $2,405.07.
• On Tuesday, gold prices rose by 0.55%, achieving the first gain in five days, as part of the recovery from a two-week low of $2,383.97 per ounce.

US Bond Yield

The yield on the US 10-year Treasury bonds fell by about 0.6 percentage points on Wednesday, continuing its losses for the second consecutive session, which favors the rise of non-yielding assets.

US Interest Rate

• According to the "Fed Watch" tool by CME Group: Futures pricing for the likelihood of a 25 basis points US interest rate cut in September is at 96%, and for November at 98%.

Economic Data

To reprice the above futures, investors are waiting throughout this week for the release of important economic data from the United States, especially on economic growth during the second quarter and the personal consumption expenditures report for June.

Indian Demand

The Indian government reduced import duties on gold and silver to 6% from 15%. ANZ Group stated that this decision improves actual demand expectations and supports jewelry manufacturing in the world's second-largest consumer of gold bars.

Gold Performance Expectations

• Tim Waterer, Chief Market Analyst at KCM Trade, said: "If GDP or core personal consumption expenditure figures rise upward, this could put negative pressure on gold prices in the short term due to the strength of the US dollar."
• He added: "But the near-term outlook for gold remains constructive from a fundamental perspective, considering that the Federal Reserve appears to be on the verge of cutting interest rates."

SPDR Gold Trust

Gold holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, increased by about 1.73 metric tons yesterday, bringing the total to 841.74 metric tons, the highest level in a week.