Gold prices retreat as US dollar hits over one month high, yields hold above 4%; silver futures decline

Gold prices declined on Tuesday, January 16, hurt by a strengthening US dollar and Treasury yields, as markets wait to hear remarks from several Federal Reserve officials this week to further gauge the central bank's monetary policy path. Spot gold was down 0.8 per cent at $2,037.40 per ounce. US gold futures fell 0.5 per cent to $2,041.50, according to news agency Reuters.

The dollar index rose 0.8 per cent to a more than one month high, making bullion less attractive for other currency holders, while yields on the benchmark US 10 year Treasury notes climbed above four per cent. Fed Governor Christopher Waller is scheduled to deliver a speech on the economic outlook before the Brookings Institution, with at least other six officials due to speak this week.

"Fed officials probably will keep a neutral guidance, keeping all options on the table based on incoming data. So to see gold prices tick higher, we need to remain on a soft landing path," said UBS analyst Giovanni Staunovo. The US central bank is widely expected to hold its policy rate steady at the end of its January 30 31 meeting.

Traders now see a 73 per cent probability of an interest rate cut in March, according to the CME Fedwatch tool. Lower interest rates increase non yielding bullion's appeal. Elsewhere, European Central Bank officials pushed back against market expectations for rapid rate cuts this year. Spot silver fell 0.9 per cent to $22.99 per ounce, platinum declined 1.4 per cent to $902.22, and palladium slipped 1.7 per cent to $954.76, according to Reuters.

Gold prices in India Gold prices slipped 100 to 63,450 per 10 grams in the national capital on Tuesday amid weak global cues, according to HDFC Securities. The precious metal had ended at 63,550 per 10 grams in the previous trade. Silver also declined 300 to 76,400 per kilogram. Snapping the two day winning streak, spot gold prices in the Delhi markets are trading at 63,450/10 grams, down by 100, said Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities.

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