Gold leapfrogs 2 per cent as US Dollar, Treasury bond Yields retreat

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On Wednesday, both US gold futures’ and spot gold prices had jumped more than 2.0 per cent to a one-month peak, as a sharp pullback from a one-year peak in American currency had rekindled the precious yellow metal’s safe-haven appeal, while a divided US Federal Reserve over tapering of fiscal support as reported in the Minutes from September 21-22 US Fed policy meet, had supercharged the bullion’s prices further.

Nevertheless, amid a sheer volatility on Wednesday’s commodity market, spot gold prices initially tumbled and pared earlier gains after US Labour Department data had unveiled that US Consumer Prices had picked up sharply in September, leading to a rise in 10-year US Treasury bond notes above 1.6 per cent.

However, as investors digested US Consumer Prices Index data for September, US Treasury Yields began to retreat, which eventually spurred up the bullion’s prices. On top of that, Minutes from September 21-22 US Fed policy meet released late in the day had spearheaded gold prices further, as Federal Reserve policymakers remained divided on how and when the Central Bank should begin to taper its monthly $120 billion bond repurchase program, however, a tapering of fiscal support could emerge by mid-November, the FOMC Minutes had reported.

The Precious metal’s prices had been backed by a feeble US Dollar as well, while concerns over a persistent rise in inflation indicators over coming months had heightened up the bullion’s safe-haven appeal.

Gold gains as US Dollar, Treasury bond Yields fall back

Citing statistics, in the day’s commodity market wind-down, spot gold prices gained 1.8 per cent to $1,791.41 an ounce, the strongest in more than a month, while US gold futures’ prices feathered up 2.0 per cent at $1,794.70.

Among other precious metals, spot silver surged 2.5 per cent to $23.09 an ounce, while platinum contracts rose 1.2 per cent to $1,019.54 per ounce and palladium futures’ prices jumped 3.5 per cent to $2,116.68 an ounce.

Meanwhile, addressing to concerns over global growth following a weaker-than-anticipated latest quarter, a senior market analyst at brokerage firm OANDA, Edward Moya, said, “Inflation expectations mixed with global growth concerns have made many investors nervous that the business and the consumer will be much weaker in the second half of 2022. Safe-haven flows are starting to come gold’s way”.