Barrick Gold Inc (GOLD)

[TRUISM]

Gold Off One-Month Lows As U.S. Dollar, Yields Retreat
PUBLISHED WED, AUG 9 2023
CNBC




On display at Agosi AG in Pforzheim is a gold bar that weighs 12.5 kilograms (400 ounces), has a fine gold content of 99.99 percent and lies on gold granules.
Uli Deck | Picture Alliance | Getty Images


Gold prices bounced back on Wednesday from one-month lows hit in the previous session, as the dollar and bond yields weakened a day ahead of the release of U.S. consumer price data that could build the case for or against further interest rates hikes.

Spot gold was up 0.1% at $1,926.09 per ounce, having dropped to its lowest since July 10 at $1,922 on Tuesday. U.S. gold futures was flat at $1,960.

“For a sustained recovery (in gold), we believe the market will need to see increased certainty on 2024 U.S. rate cuts,” said Baden Moore, head of carbon and commodity strategy at National Australia Bank.

“We continue to be cautious on the outlook here as Fed rate-cut expectations continue to face risks of deferral or reduction,” Moore said, adding that U.S. CPI, initial jobless claims and ISM data were key market indicators in focus along with China stimulus.

Data earlier showed China’s consumer prices fell into deflation in July as the world’s second-largest economy struggled to revive demand and pressure mounted on authorities to release more direct stimulus.

Gold, which is usually seen as a hedge against economic risks, was also supported by renewed worries about the health of the world’s largest economy after ratings agency Moody’s downgraded several U.S. lenders.

Longer-dated U.S. Treasury yields fell in response, making non-interest-bearing bullion more attractive. The dollar index was also off Tuesday’s high, down 0.2%.

“With safe-haven flows remaining elusive, the precious metal will be relying on a dip from the U.S. dollar if it is to mount a move to the upside,” Tim Waterer, chief market analyst at KCM Trade, said in a note.



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