Pullback in US yields spurs gold's march toward record peak

Reuters

Pullback in US yields spurs gold's march toward record peak

2:15 chiều giờ GMT, 16 Tháng 10 2024

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Gold industry sees prices rising to $2,941/oz over 12 months

Benchmark 10-year note yields slipped to over a week low

Odds of 25 bps US rate cut in November at 96%

ECB rate cut decision expected on Thursday

Adds graphic and updates prices

By Anushree Mukherjee

Oct 16 (Reuters) -Gold advanced towards record highs on Wednesday as gains in non-yielding bullion were bolstered by weakness in U.S. bond yields and expected rate cuts by major central banks, with additional safe-haven support from ongoing geopolitical conflicts.

Spot gold XAU= rose 0.5% to $2,673.77 per ounce by 11:33 a.m. ET (1533 GMT), inching close to a record high of $2,685.42 it hit on Sept. 26. U.S. gold futures GCcv1 gained 0.4% to $2,690.50.

"Expectations of a 25-basis-point rate cut by the U.S. Federal Reserve in November are solidifying, weaker inflation data in Europe and the UK have increased expectations for more aggressive ECB and BoE easing, leading to generally lower yields which have lifted gold," said Peter A. Grant, vice president and senior metals strategist at Zaner Metals.

"There's even an outside chance we could see close to $3,000, and that's probably more of a Q1 2025 target," Grant said.

U.S. Treasury yields fell to their lowest in over a week, making gold more attractive as it tends to thrive in a low interest rate environment. US/

Traders currently see about a 96% chance of a 25-basis-point U.S. rate cut in November, according to the CME FedWatch tool.

The European Central Bank looks set to deliver another rate cut on Thursday, while a drop in British inflation indicated a rate cut next month by the Bank of England.

The main bullish drivers for gold include risk of fiscal instability, safe-haven appeal, geopolitical tensions, de-dollarization, U.S. Presidential election uncertainties and rate cuts by central banks, said Ole Hansen, head of commodity strategy at Saxo Bank.

Delegates to the London Bullion Market Association's annual gathering predicted gold prices would rise to $2,941 over the next 12 months and silver prices would jump to $45 per ounce.

Spot silver XAG= firmed about 1% to $31.77. Platinum XPT= rose 1.3% to $996.55 and palladium XPD= climbed 1% to $1,019.00.

Spot gold price in USD per oz https://reut.rs/3NuDm0W

Reporting by Anushree Mukherjee in Bengaluru, additional reporting by Swati Verma; Editing by Krishna Chandra Eluri and Tasim Zahid

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