Gold price falls as market mood remains cautious ahead of US inflation data.
Gold prices are on a downward trend that began on January 7. Falling to roughly $2,020 per troy ounce during the Asian session on Tuesday. The precious metal is facing pressure as the US dollar advances for the second straight day. Aided by low US bond yields ahead of the release of US inflation data on Tuesday.
The enhanced Greenback dulls the luster of the bright metal.
Anticipated inflationary pressures in the United States (US) have led to expectations. That the The Federal Reserve (Fed) will refrain from lowering interest rates at its March meeting. This prognosis is lowering the appeal of non-yielding assets such as gold. Markets are pricing in only a 14% chance that the Fed will decrease interest rates in March. However, the chances of a rate drop at the May meeting are thought to be around 60%.
Lorie K. Logan, President of the Dallas Federal Reserve Bank, recently declared that there is no immediate need to cut interest rates. She acknowledged “significant progress” in reducing inflation, but emphasized the significance of gathering additional evidence to guarantee that this progress is sustainable.
During times of geopolitical stress, investors appear to prefer the US dollar over gold as a safe haven.
The price of gold is facing downward pressure as the US Dollar acquires renewed demand amid growing geopolitical tensions in the Middle East. Yemen’s Houthi rebels reportedly shot missiles at a ship destined for an Iranian port, causing minor damage to the vessel but no injuries to its crew, according to authorities.
On Monday, Israel carried out a series of airstrikes in Rafah, a city in southern Gaza. Israeli Prime Minister Benjamin Netanyahu announced on Sunday that he intends to escalate military operations in Rafah after Hamas rejected a cease-fire deal.
