Gold futures tacked on gains to kick off the trading week despite a flat US dollar and gains in US Treasurys. The yellow metal is looking to regain momentum after it plunged once touching the record high of $2,152.30. Gold prices will be taking their cue from the broader financial markets and geopolitical tensions this week as it will be relatively quiet on the US economic data front.
February gold futures rose $5.70, or 0.28%, to $2,041.40 per ounce at 17:28 GMT on Monday on the COMEX division of the New York Mercantile Exchange. Gold is coming off a weekly gain of around 2%, adding to its year-to-date rally of nearly 12%.
Silver, the sister commodity to gold, struggled to hold $24. January silver futures fell $0.054, or 0.22%, to $24.10 an ounce. The white enjoyed a weekly gain of about 4%, but it is still down around 0.3% on the year.
Gold has benefited immensely from the Federal Reserve signaling three rate cuts next year and two more in 2025, suggesting a loosening of monetary policy conditions. However, there has been some confusion since the final Fed policy meeting of 2023.
New York Fed President John Williams recently told CNBC that officials have not discussed rate cuts. Additionally, Chicago Fed President Austan Goolsbee told the business news network that investors might have misinterpreted the central bank.
“It’s not what you say, or what the chair says. It’s what did they hear, and what did they want to hear,” said Chicago Fed President Austan Goolsbee said on CNBC’s “Squawk Box.” “I was confused a bit — was the market just imputing, here’s what we want them to be saying?”
The US Treasury market puked following the announcement while stocks soared. However, bonds are making a comeback as the benchmark ten-year yield jumped three basis points to 3.96%. The two-year yield was flat at 4.455%, while the 30-year bond rose 4.6 basis points to 4.07%.
Gold is typically sensitive to fluctuations in interest rates because it affects the opportunity cost of holding non-yielding bullion.
The US Dollar Index (DXY), a gauge of the buck against a basket of currencies, was relatively unchanged at around 102.50. The greenback tanked last week following the Fed news. A weaker buck is good for commodities priced in dollars because it makes it cheaper for foreign investors to purchase.
This week, the Fed’s preferred inflation metric (PCE), the final GDP estimate for the third quarter, and housing data will be published.
In other metal markets, February copper futures fell $0.042, or 1.08%, to $3.8485 per pound. February platinum futures tacked on $1.80, or 0.19%, to $954.40 an ounce. February palladium futures slumped $12.40, or 1.03%, to $1,190.00 per ounce.