Gold Prices Climb as Dollar and Treasury Yields Pull Back


Gold prices saw an upward trajectory on Tuesday, driven by a retreat in both the dollar and Treasury yields. This development comes just before the release of critical U.S. inflation and jobs data later this week, which could significantly impact the trajectory of interest rates.

Gold’s Uptick Amidst Dollar and Yield Movements

Spot gold experienced a 0.1% increase, reaching $1,921.69 per ounce. This upswing follows the peak observed on Monday, which marked the highest point since August 10.

Simultaneously, U.S. gold futures witnessed a 0.1% uptick, reaching $1,949.30.

Dollar Dip and Treasury Yield Shifts

Major currencies witnessed a dip in the U.S. dollar, while benchmark U.S. 10-year Treasury yields pulled back from their highest levels since 2007—a peak reached just last week.

The dollar’s decline typically renders gold, a non-interest-bearing asset, more accessible to holders of other currencies.

Focus on Key Economic Data

The upcoming week is packed with economic releases, with special attention on the U.S. PCE price index—a preferred gauge of inflation for the Federal Reserve—set to be unveiled on Thursday. The non-farm payrolls report, scheduled for Friday, will also be under close scrutiny.

Global Concerns and Growth Apprehensions

Mounting worries encompass record government debt, geopolitical tensions with potential to disrupt global trade, and persistently weak productivity gains. These factors raise concerns about the future growth prospects of various nations, potentially hindering development before it even gains momentum.

European Central Bank and Japanese Insights

European Central Bank policymaker Robert Holzmann hinted that unless inflation data surprises significantly, there could be grounds for further interest rate hikes in the September meeting. This sentiment was shared in an interview with Bloomberg News on Monday.

On a different note, Japanese government data unveiled a rise in the jobless rate to 2.7% in July compared to the previous month.

In a separate development, the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, reported a 0.3% increase in holdings, totaling 886.64 metric tons on Monday.