Gold Price Hovers Around $1,940 Amid Rising U.S. Real Yields,...
The price of gold continues to hover around the $1,940 mark as Tuesday's trading session unfolds. While market challenges persist, geopolitical factors have contributed to a decrease in volatility for this precious metal.
Throughout 2023, U.S. real yields have steadily climbed, recently reaching a 14-year peak of over 1.90% at the 10-year maturity point. Real yields are calculated by subtracting the market-implied inflation rate, derived from Treasury inflation-protected securities (TIPS), from the nominal yield for the same duration.
The last time real yields were at this level was in 2009, a period when spot gold traded below $1,000. In a more recent example from 2018, when real yields were around 1.0%, spot gold was priced at less than $1,300 per ounce.
XAUUSD BUY 1936 1934 🔼🔼
✅TP1: 1940
✅TP2: 1950
🚫SL: 1930
Throughout 2023, U.S. real yields have steadily climbed, recently reaching a 14-year peak of over 1.90% at the 10-year maturity point. Real yields are calculated by subtracting the market-implied inflation rate, derived from Treasury inflation-protected securities (TIPS), from the nominal yield for the same duration.
The last time real yields were at this level was in 2009, a period when spot gold traded below $1,000. In a more recent example from 2018, when real yields were around 1.0%, spot gold was priced at less than $1,300 per ounce.
XAUUSD BUY 1936 1934 🔼🔼 ✅TP1: 1940
✅TP2: 1950
🚫SL: 1930
Note
On Tuesday, gold prices remained subdued as investors held off for additional signals regarding the state of the U.S. economy in anticipation of the upcoming Federal Reserve meeting later this month. Expectations for a halt in interest rate increases have been on the rise.Note
Spot gold held steady at $1,937.58 per ounce as of 0058 GMT, maintaining its position just below the one-month highs achieved on Friday. Meanwhile, U.S. gold futures slipped 0.2% to $1,963.40, with trading activity remaining limited due to the U.S. holiday on Monday.Note
Running 10pipsNote
* The U.S. dollar index experienced a 0.1% decline compared to other major currencies.* According to a survey released on Monday, investor confidence in the euro zone dropped more than anticipated at the beginning of September. This decline was primarily attributed to Germany's ongoing economic struggles, which continue to weigh on the overall region.
Note
Running +35Pips ✔️✔️Note
* In August, central banks in both major developed and emerging economies paused their interest rate hikes, further reducing the pace and magnitude of such moves. This shift occurred as differing growth forecasts and uncertainties related to inflation blurred the path forward.Note
* According to former board member Goushi Kataoka, the Bank of Japan (BOJ) can start transitioning away from its accommodative monetary policy, but only once it has firmly established sustainable achievement of its 2% inflation target.Note
On Tuesday, gold prices inched downwards due to the resilient U.S. dollar, despite subdued trading conditions. Traders were cautiously seeking additional indications about the U.S. Federal Reserve's monetary policy direction, following the widely anticipated interest rate pause expected later this month.Note
Barot suggested that should the U.S. economy indeed experience a soft landing, there is a possibility of gold facing further declines. This would occur as some of the expectations for aggressive rate cuts in the latter half of 2024 could be scaled back.Note
Recent economic data from the United States has provided support for the belief in a soft landing scenario. Concerns about inflation and recession have somewhat diminished, reinforcing the notion that the Federal Reserve may not need to implement additional interest rate hikes.
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