Gold price gained ground because of red sea issues.
Gold price rose for the third day in a row on Monday, with the metal reaching roughly $2,055 per troy ounce during the Asian session. The yellow metal’s price rise is ascribed to risk aversion. Because to geopolitical tensions in the Middle East. As well as anticipation about anticipated rate reduction by the Federal Reserve (Fed) in March.
The tension between Israel and Gaza escalated after the Houthis attacked a US Navy vessel.
Concerns about the The Israel-Gaza war has escalated. Particularly after the Houthis, led by Iran, fired an anti ship cruise missile at the USS Laboon in the Red Sea on Monday. This trend has contributed to increasing demand for gold prices. A traditional safe haven asset in times of global turmoil. Market investors are keeping a careful eye on potential implications on shipments in the Strait of Hormuz. As well as Iran’s reaction to recent geopolitical developments.
The US Treasury yields add to the downward pressure on the US dollar.
The US Dollar (USD) is hovering around 102.40 with a bearish bias. Impacted by a drop in US Treasury yields. Which could be caused by lower US Producer Price Index (PPI) data. As a result of the reduction in US Treasury yields. The DXY has pared its intraday gains. The yields over two and ten years Currently. The yields on US bond coupons are 4.14% and 3.94%, respectively.
Gold Market mood has shifted as a result of Barclays’ assessment of the Fed rate decrease.
Furthermore, Barclays altered its projection for the first Federal Reserve rate cut on Friday, shifting it from June to March. This shift in outlook has moved gold market sentiment toward predictions of the Fed relaxing monetary policy, placing downward pressure on the US dollar. Barclays analysts predicted that the Federal Open Market Committee (FOMC) would cut the Fed Funds rate by 25 basis points at its March meeting in a note posted on Friday.
