Global Gold Market: Gold prices decline due to the rise of the US dollar and US Treasury yields; focus on US PCE data
Gold prices fell due to a stronger dollar and rising U.S. Treasury yields, with spot gold down 0.6% to $2,897.91. The market is focused on the upcoming U.S. PCE data to assess the Federal Reserve's policy direction. Analysts point out that if the PCE data is stronger than expected, it may impact gold prices. Meanwhile, prices for silver, platinum, and palladium also declined
Reuters, February 27 -
Gold prices fell on Thursday, pressured by a stronger dollar and rising U.S. Treasury yields, as investors awaited key U.S. inflation reports to assess the Federal Reserve's policy path.
At 0645 GMT, spot gold (XAU=) was down 0.6% at $2,897.91 per ounce. U.S. gold futures (GCcv1) also fell 0.7% to $2,909.30.
The dollar index (.DXY) rose 0.2%, further distancing itself from an 11-week low touched earlier, after U.S. President Trump vaguely promised to impose tariffs on Europe and further delayed tax plans for Canada and Mexico. (FRX/CN)
The benchmark 10-year U.S. Treasury yield (US10YT=RR) rebounded, reducing gold's appeal. (US/NCN)
"A slight rebound in the dollar and U.S. Treasury yields seems to be putting some pressure on gold today," said Ilya Spivak, global macro director at Tastylive. Several Federal Reserve officials are scheduled to speak later in the day, providing more clues about the Fed's easing path this year. The market will next focus on the Fed's preferred inflation gauge—the Personal Consumption Expenditures (PCE) price index—set to be released on Friday. A Reuters survey showed that the market expects PCE to rise 0.3% month-on-month, consistent with the increase in December 2024. "After last week's disappointing U.S. PMI data, the market is currently very sensitive to concerns about economic growth, and if the PCE results are stronger than expected, it could weaken the chances of a Fed rate cut in the short term, which may hurt gold," Spivak said. Meanwhile, Russian and U.S. diplomats are set to hold talks in Istanbul aimed at restoring their respective diplomatic missions, seen as a step towards ending the war in Ukraine. Spot silver (XAG=) fell 0.2% to $31.77 per ounce; platinum (XPT=) was down 0.1% at $964.70; and palladium (XPD=) held steady at $926.47
