01/16/2024 – 15:54
The most liquid gold futures contract closed down around 1% in the session this Tuesday, 16th, pressured by the advance of the dollar against rival currencies and also by the rise in Treasury yields, after the director of the Federal Reserve (Fed, the North American central bank) Christopher Waller predicts a lower interest rate cut than expected by the market in 2024.
On Comex, the metals division of the New York Mercantile Exchange (Nymex), gold scheduled for delivery in February 2024 closed down 1.04%, at US$2,030.20 per troy ounce.
Oanda analyst Craig Erlam reckons the metal is struggling to generate new momentum from previous records.
According to his analysis, the speed at which the record was reversed suggests that prices remain at a significant psychological threshold.
Commerzbank highlights that the search for safe havens should play a less significant role in the short term, as expectations of more aggressive cuts by the Fed are decreasing and considering that the conflicts in the Middle East are not having as much influence on assets.
TD Securities, in turn, assesses that extremely strong buying activity in China offers some support to the commodity, with major investors in Shanghai expanding their positions. “Our tracking suggests that the top ten gold traders on the Shanghai Stock Exchange have already added almost 10 tonnes of gold to their net length since the New Year celebrations, bringing their purchases to 23 tonnes since November.”
Furthermore, the Canadian bank highlights that limited selling activity from other groups suggests that gold's downside is limited.
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