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Gold surges amid growing expectations of Fed rate cuts in September. US 10-year Treasury yield drops to 4.288%, while US Dollar Index falls below 105.00. Inflows into Gold ETFs support the metal, with eyes now on US June inflation data and economic indicators. Gold price escalated on Wednesday for back-to-back days amid growing speculation that the Federal Reserve (Fed) could begin to slash higher interest rates at the September meeting. Consequently, US Treasury bond yields and the Greenback fell, a tailwind for the golden metal. The XAU/USD trades at $2,372, up by more than 0.30%. Falling US Treasury bond yields and a soft US Dollar bolstered the non-yielding metal. The US 10-year benchmark note coupon dropped one-and-a-half basis points (bps) to 4.288%, while the US Dollar Index (DXY) trended below the 105.00 mark, losing 0.06%. In his appearance at the US House of Representatives, Fed Chair Jerome Powell repeated most of his remarks revealed at a US Senate committee on Tuesday. He acknowledged the progress on inflation, yet Powell stated the board is not confident that lowering rates will help prices reach the 2% goal. Despite ongoing pullbacks, Gold remains underpinned by a second consecutive month of inflows into Gold exchange-traded funds (EFTs) in June, driven by additions to holdings by Europe and Asia-listed funds. With Fed Chair Powell’s semi-annual testimony in the rearview mirror, investors eye the release of US June inflation figures on Thursday. That, Initial Jobless Claims and the University of Michigan Consumer Sentiment data will set Gold’s direction. Daily digest market movers: Gold price escalates on Fed rate cut hopes US CPI is expected to decrease from 3.3% to 3.1% annually in June, while core inflation is projected to remain steady at 3.4% YoY. According to the consensus, Initial Jobless Claims for the week ending July…

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Filed under: News - @ July 11, 2024 12:22 am