Gold Prices Dip to Over One-Month Low Amid Strong Economic Data
Gold prices witnessed a significant decline, reaching over a one-month low, as robust economic data bolstered the U.S. dollar and Treasury yields, diminishing hopes for an imminent U.S. interest rate cut.
Key Developments:
- Spot Gold Price: Dropped by 0.9% to $2,008.89 per ounce, the lowest since December 13.
- U.S. Gold Futures: Also fell by 0.9%, reaching $2,011.80.
- U.S. Retail Sales Data: Exceeded expectations in December, indicating a strong economy and impacting gold prices.
Market Reactions:
- Strengthened Dollar: The U.S. dollar reached a one-month high following the positive retail sales data.
- Rising Treasury Yields: The yields on U.S. 10-year Treasury notes also increased.
- Fed's Rate Cut Prospects: The market now estimates around a 57% chance of a rate cut in March, according to the CME FedWatch tool.
Analysts' Insights:
- Bob Haberkorn, RJO Futures: Suggested that doubts about interest rate cuts are pressuring gold prices. He noted geopolitical risks would continue to support gold prices, keeping them around $2,000.
- Tai Wong, Independent Metals Analyst: Warned of technical risks for gold, stating that closing below $2,020 could indicate a downward break in the sideways range.
Other Precious Metals:
- Silver: Experienced a 1.5% drop to $22.57 per ounce.
- Platinum: Declined by 1.8% to $879.09.- Palladium: Fell to $919.14, the lowest since 2018.
