Gold prices declined for the second day, pressured by rising US Treasury yields and Powell’s hawkish comments. Dropping from a record high of $2,942 to $2,890, investors are looking to US inflation data for direction. A stronger-than-expected CPI could further impact the Fed’s rate decisions and gold’s future.
Global gold prices have seen a decrease for the second consecutive day after a peak due to rising US Treasury yields and comments from Federal Reserve Chair Jerome Powell about interest rates. Investors are now looking towards upcoming US inflation indicators for guidance on gold’s price movements.
On Wednesday, gold’s price dipped 0.3% to a low of $2,883 per ounce but slightly recovered to $2,890. This decline follows a record high of $2,942 per ounce on Tuesday, where it ultimately closed at $2,897, as reported by Gold Bullion.
Chair Powell’s testimony to Congress underscored the Fed’s vigilant monetary policy, indicating that rate adjustments will occur only if inflation subsides or labor markets deteriorate. His statements propelled the 10-year US Treasury yield above 4.5%, putting additional downward pressure on gold valuations.
Traditionally, gold serves as a safeguard against inflation and economic instability; however, escalating interest rates have reduced its appeal by elevating the opportunity costs associated with holding gold. Profit-taking activities following gold’s recent highs have also contributed to selling pressure in the market.
Overall, the recent decline in gold prices can be attributed to rising interest rates and expectations surrounding US inflation data. Concerns about national economic policy and geopolitical uncertainties continue to play a crucial role in shaping market dynamics for gold. As investors monitor upcoming inflation reports, the potential for further shifts in both fiscal strategy and gold valuation remains significant.
Original Source: www.dailynewsegypt.com
