Mumbai, 17 Jun (Commoditiescontrol): Gold prices declined on Monday, pressured by rising U.S. Treasury yields, as investors awaited more economic data to determine the Federal Reserve's timeline for interest rate cuts. Spot gold fell by 0.3% to $2,326.78 per ounce, while U.S. gold futures also dropped 0.3%, settling at $2,341.70.
The uptick in benchmark 10-year U.S. Treasury yields, which last stood at 4.2402%, diminished the allure of non-yielding assets like gold. This movement came after data released last week revealed that consumer prices in May remained unchanged for the first time in nearly two years, with producer prices experiencing an unexpected decline.
Following a two-day policy meeting where the Federal Reserve held interest rates steady, updated economic forecasts from Fed officials indicated only a single quarter-point rate cut for this year. Minneapolis Fed President Neel Kashkari stated on Sunday that it's a "reasonable prediction" for the U.S. central bank to cut rates once this year, potentially waiting until December.
Lower interest rates typically make non-yielding assets like gold more attractive by reducing the opportunity cost of holding them.
Meanwhile, gold demand in India remained subdued last week despite a recent price correction. Buyers delayed purchases due to the lack of major festivals, and premiums in top consumer China fell due to weak consumer sentiment and high spot prices. According to the official Financial News, China still has room to lower interest rates, but internal and external constraints challenge its ability to adjust monetary policy.
Other precious metals also experienced mixed performance. Spot silver decreased by 0.3% to $29.46 per ounce, platinum remained unchanged at $957.57, and palladium saw a slight gain of 0.5%, reaching $894.37 per ounce.
(By Commoditiescontrol Bureau: 09820130172)
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