Gold price fell while the US dollar rise.
Gold prices fell marginally on Tuesday after snapping a three-day winning streak. Dropping to around $2,018 per troy ounce during Asian trading hours.
The improvement in US Treasury yields could have an impact on non-yielding assets such as gold.
The stronger US Dollar (USD), which can be ascribed to increased US bond yields, is putting pressure on gold prices. The higher trend in bond yields has put downward pressure on non-yielding assets such as gold.
Investors are looking forward to the FOMC minutes to learn more about the Fed’s outlook on interest rates.
Furthermore, market participants are keenly anticipating. The release of The Federal Open Market Committee (FOMC) meeting minutes are slated for Wednesday. This announcement could shed light on the Federal Reserve’s outlook on the future path of interest rates.
However, ANZ forecasts that the Federal Reserve (Fed) will begin the rate-cutting cycle in July 2024. According to the CME FedWatch Tool, the US Federal Reserve has a 53% chance of cutting interest rates by 25 basis points at its June meeting.
On Monday, the US dollar was damaged by Fed officials’ recent dovish remarks, which suggested rate cuts in 2024. Mary C. Daly, president of the San Francisco Federal Reserve, stated that three rate cuts are an acceptable baseline for 2024. Additionally, St. Louis Federal Reserve (Fed) president James Bullard urged that the Fed consider decreasing interest rates at Its March meeting.
The US Dollar Index (DXY), which measures the value of the US dollar against six other major currencies, has ended a four-day losing trend. The DXY is trading higher around 104.40, with 2-year. And 10-year US government coupon yields currently at 4.65% and 4.30%, respectively.
