Demand Lifts Gold Price Despite Falling Yields

2 Apr 2024 , 11:19 AM

Following a record high in the previous day due to mounting expectations that the Reserve would decrease interest rates for the first time in June, gold prices remained stable on Tuesday due to lower U.S. Treasury yields.

Spot gold hit an all-time high of $2,265.49 on Monday, but it remained steady at $2,250.26 per ounce. American gold futures increased by 0.6% to $2,270.70 an ounce.

The benchmark yield on U.S. 10-year Treasury bonds decreased, increasing the allure of gold with no yield.

In March, U.S. manufacturing expanded for the first time in one and a half years as new orders surged and production swiftly recovered, but factory employment remained low and input prices continued to rise.

On Monday, the Federal Reserve Bank of New York said that February saw a decrease in the underlying inflation pressures.

According to polls and data, factory activity declined in several Asian economies in March, but there were some encouraging signals in South Korea and China.

The central bank of Australia plans to switch to a system that regularly conducts money market operations to supply the banking sector with sufficient liquidity.

The CME Group’s FedWatch Tool indicates that traders are pricing in a 57% chance that the Fed will start reducing rates in June. Holding bullion has a lower opportunity cost when interest rates are lower.

Spot silver increased by 0.4% to $25.17 an ounce, palladium climbed by 0.4% to $1,000.09, and platinum increased by 0.2% to $903.50.

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