Gold prices rose on Tuesday, as the US dollar and Treasury yields fell after traders slightly pared bets for an interest rate cut by the US Federal Reserve in the first quarter of 2024.
Spot gold was up 0.2 percent at $2,033.49 per ounce. Bullion had surged to an all-time high of $2,135.40 on Monday, before dropping over $100 in a single day to close 2 percent lower.
US gold futures for February delivery rose 0.5 percent to $2,051.70.
Making gold less expensive for other currency holders, the dollar index fell 0.1 percent, while yields on 10-year Treasury notes slipped to 4.2587 percent.
Even after the dramatic moves in gold prices over the past 24 hours, “for now, the overall trend for gold still looks bullish,” said Ilya Spivak, head of global macro at Tastylive.
A wave of profit-taking seems to have triggered after gold rallied at weekly open, to catch-up to Fed Chair Jerome Powell’s dovish comments from Friday, along with “pre-positioning ahead of this week’s event risk (Reserve Bank of Australia and Bank of Canada rate decisions, US jobs data),” added Spivak.
However, traders have lowered their Fed rate cut bets by March next year to about 60 percent, from 70 percent on early Monday, FedWatch Tool shows.
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