Gold prices were broadly steady on Tuesday, as the recent rally to all-time highs was tempered by US economic data which pushed treasury yields higher.
Gold touched a low of $2,365 an ounce during the day, but picked up slightly to trade at $2,393 an ounce later in the afternoon session. That compares with around $2,386 an ounce in late trades on Monday.
US retail sales figures released Monday came in well above expectations for March, helping to drive yields on US 10-year treasury notes to a five-month high. Treasury yields continued to make further gains on Tuesday, and this helped to stem gold’s rally, keeping the price relatively stable after a surge higher over March and the first half of April that saw the yellow metal hit fresh all-time highs of over $2,400 an ounce.
However, gold prices also remain supported by heightened geopolitical tensions as Israel’s war cabinet met to discuss a response to an Iranian drone and missile attack on the country that was seen as a retaliation for a recent bombing of an Iranian consulate building in Syria which killed high-ranking military figures.
Israel’s key allies were urging restraint after the latest developments, although the uncertainty surrounding the recent tensions presents risks for financial markets that support safe-haven assets like gold.
Looking ahead, Wednesday and Thursday will see the release of the latest monthly inflation figures from the UK and Japan, respectively, providing potential clues on monetary policy by central banks in those countries.
Meanwhile, planned speeches by several US Fed officials on Wednesday and Thursday may help chart the path forward for US interest rates, with the markets recently scaling back bets on the likelihood of three interest rate cuts in 2024.
Frank’s experience covering the commodities markets spans 22 years, with a particular specialism in metals, carbon and energy markets. He has worked as a senior editor for S&P Global Commodity Insights (formerly Platts) and before this, at ICIS-LOR, a part of Reed Business Information (Reed Elsevier), where he covered the petrochemicals markets from 2003 to 2005.
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