Placeholder canvas
1.7 C
London
Sunday, February 25, 2024
HomeBusinessGold hits 6-½ month low as dollar, yields surge without end.

Gold hits 6-½ month low as dollar, yields surge without end.

Date:

Related stories

Helldivers 2 servers expanding for 800k players, surprising small studio

The servers for Helldivers 2 are once again being...

Upcoming Chance to Buy Bitcoin and Ethereum, Advised by Crypto Analyst.

A prominent analyst suggests that investors may have an...

Solar fees to increase for over 1 million Arizona customers in 13 words

The Arizona Corporation Commission has approved a rate hike...

Rolling out new Google Account sign-in page, see gallery.

Google has announced the rollout of a new sign-in...
spot_img

Gold prices reached a 6-½ month low on Wednesday as the strong dollar and rising Treasury yields continued to divert investment away from the precious metal. The most active gold futures contract on New York’s Comex fell to $1,894 an ounce, a decrease of 1.3%. This marked the lowest level for December gold since March. Similarly, spot gold dropped to $1,876.87, its lowest level since March 10. The rally of the US dollar and increasing Treasury yields indicate that the dollar’s dominance is unlikely to be challenged in the near future.

The demand for gold has diminished as investors are drawn towards the dollar and Treasury yields. The stronger dollar, supported by rising Treasury yields, suggests that the US growth exceptionalism story remains strong. Orders for long-lasting or durable goods surged by 0.2% in August, driven by increased defense spending. However, the US consumer spending is expected to slow due to labor market and wage growth cooling, along with rising inflation. Fitch Ratings predicts a decline in real spending in the final quarter of 2023 and contraction in the first and second quarters of 2024.

Despite leaving interest rates unchanged, the Federal Reserve recently projected a rate increase by the end of the year. The Fed’s stance of maintaining the policy rate at the meeting indicates the central bank’s concern regarding energy-driven inflation. The fear that the Fed’s hawkish stance will negatively impact global growth is countered by the need to control oil prices in order to achieve an annual inflation target of 2%. However, rising Treasury yields and a strong dollar are likely to keep rates high and support the dollar’s strength.

Source link

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

LEAVE A REPLY

Please enter your comment!
Please enter your name here