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Gold slides to daily low near $4,625 as USD firms ahead of US PCE
Gold is pressured by a firmer US dollar ahead of the US Personal Consumption Expenditures Price Index, while a Treasury buyback strategy is pulling down US bond yields.
Gold prices stayed under pressure in the first half of Wednesday’s European session, refreshing a daily low in the $4,630 to $4,625 area, as the US dollar gained traction.
FXStreet said the dollar’s modest advance came ahead of the upcoming US Personal Consumption Expenditures Price Index, a key data point that can influence the expected interest rate path. The outlook also hinges on Federal Reserve Chair Kevin Warsh’s remarks at the Jackson Hole Symposium on Friday.
The article also pointed to Treasury dynamics that are weighing on yields, including a buyback strategy that is seen as contributing to lower US bond yields. It noted that two senior officials said the Treasury could draw on its near $1 trillion General Account to fund plans to increase longer-term bond buybacks.
Meanwhile, FXStreet linked part of gold’s pressure to developments in oil and rate expectations, citing a drop in crude oil after Iran said it restarted talks with Oman on managing shipping traffic through the Strait of Hormuz. The report added that sanctions relief and an end to the naval blockade have been discussed in exchange for reopening the strait and halting attacks by regional proxies, a development that could affect greenback sentiment and support gold.
Latest closeGold $4,432.00 ▲1.6%|WTI crude $82.40 ▲1.4%