Gold prices decline before crucial US data

Gold prices fell in European trade on Wednesday for the first time in three days, moving away from a week high under pressure from higher US 10-year treasury yields.

Despite the decline, the precious metal is still trading below $2900 an ounce ahead of important US labor data, which would provide clues on the odds of a Fed rate cut in the next quarter.

Prices

Gold prices fell 0.55% today to $2902 an ounce, with a session-high at $2922.

On Tuesday, gold rose 0.85%, the second profit in a row, hitting a week high at $2927 as the dollar dropped.

US Yields

US 10-year treasury yields rose 0.9% on Wednesday away from five-month lows at 4.108%, in turn underpinning the dollar.

It comes as investors assess the impact of US tariffs on Canada, Mexico, and China in regards to inflation in the US.

US Rates

New York Fed President John Williams said the US tariffs will likely push inflation higher, but he believes current interest rate policies are suitable and don’t require changes.

According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut in March stood at just 7%.

Now investors await important US data on private sector employment and the official payrolls report later this week to gather more clues.

The SPDR

Gold holdings at the SPDR Gold Trust rose 0.87 tons yesterday to a total of 901.8 tons.