Gold Declines Over 1% as Dollar Strengthens and Yields Surge in Response to Hawkish Fed Remarks by Waller

<img width="250" height="167" src="https://www.leaprate.com/wp-content/uploads/2024/01/FIN-LP-Gold-Declines-Over-1-as-Dollar-Strengthens-and-Yields-Surge-in-Response-to-Hawkish-Fed-Remarks-by-WalleriStock-1472696526-250×167.jpg" class="webfeedsFeaturedVisual wp-post-image" alt="Gold decline" decoding="async" style="float: left; margin-right: 5px;" link_thumbnail="" srcset="https://www.leaprate.com/wp-content/uploads/2024/01/FIN-LP-Gold-Declines-Over-1-as-Dollar-Strengthens-and-Yields-Surge-in-Response-to-Hawkish-Fed-Remarks-by-WalleriStock-1472696526-250×167.jpg 250w, https://www.leaprate.com/wp-content/uploads/2024/01/FIN-LP-Gold-Declines-Over-1-as-Dollar-Strengthens-and-Yields-Surge-in-Response-to-Hawkish-Fed-Remarks-by-WalleriStock-1472696526-700×467.jpg 700w, https://www.leaprate.com/wp-content/uploads/2024/01/FIN-LP-Gold-Declines-Over-1-as-Dollar-Strengthens-and-Yields-Surge-in-Response-to-Hawkish-Fed-Remarks-by-WalleriStock-1472696526-768×512.jpg 768w, https://www.leaprate.com/wp-content/uploads/2024/01/FIN-LP-Gold-Declines-Over-1-as-Dollar-Strengthens-and-Yields-Surge-in-Response-to-Hawkish-Fed-Remarks-by-WalleriStock-1472696526-120×80.jpg 120w, https://www.leaprate.com/wp-content/uploads/2024/01/FIN-LP-Gold-Declines-Over-1-as-Dollar-Strengthens-and-Yields-Surge-in-Response-to-Hawkish-Fed-Remarks-by-WalleriStock-1472696526-245×163.jpg 245w, https://www.leaprate.com/wp-content/uploads/2024/01/FIN-LP-Gold-Declines-Over-1-as-Dollar-Strengthens-and-Yields-Surge-in-Response-to-Hawkish-Fed-Remarks-by-WalleriStock-1472696526-500×333.jpg 500w, https://www.leaprate.com/wp-content/uploads/2024/01/FIN-LP-Gold-Declines-Over-1-as-Dollar-Strengthens-and-Yields-Surge-in-Response-to-Hawkish-Fed-Remarks-by-WalleriStock-1472696526.jpg 1254w" sizes="(max-width: 250px) 100vw, 250px" /><p>According to a Reuters report, spot gold was down by 1.3%, reaching $2,027.26 per ounce, following three consecutive sessions of gains at 2:36 p.m. E.T. (19:36 GMT). U.S. gold futures also settled more than 1% lower at $2,030.2.</p>
<p>A senior analyst at Kitco Metals, Jim Wyckoff, commented:</p>
<blockquote><p>Strong gains in the U.S. dollar index are pressuring the gold market, along with a rise in U.S. Treasury yields today on this first day back from the three-day holiday weekend. ..However, one could argue that losses in gold are not bad considering the dollar’s strength, as tensions in the Middle East are providing support to prices.</p></blockquote>
<p>The dollar index surged by nearly 1%, reaching a more than one-month high. This increase made gold less appealing to investors using other currencies. Simultaneously, yields on the benchmark US 10-year Treasury notes saw an uptick.</p>
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<p>Waller emphasised that the United States was “within striking distance” of the Fed’s 2% inflation target. However, he suggested that the central bank refrain from rushing into cuts in its benchmark interest rate until it becomes evident that lower inflation will persist.</p>
<p>It is widely anticipated that the <a href="https://www.leaprate.com/financial-services/federal-reserve-predicted-to-cut-rates-throughout-2024-and-2025/" target="_blank" rel="noopener">Federal Reserve</a> will maintain its current policy rate following the meeting scheduled for 30-31 January. As indicated by the CME Fedwatch tool, traders are assessing a 67% likelihood of an interest rate reduction occurring in March.</p>
<p>In contrast to these expectations, European Central Bank officials pushed back against the market’s anticipation of swift rate cuts this year.</p>
<p>Spot silver experienced a 1.2% decline in the broader precious metals market, settling at $22.93 per ounce. Platinum also dropped by 2.1%, reaching $895.56, while palladium recorded a 3.8% drop, falling to $934.32, highlighting its lowest level in over one month.</p>
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