PRECIOUS-Gold dips on higher bond yields, Fed speakers on tap

BY Reuters | ECONOMIC | 06/17/24 10:26 AM EDT


Fed's Kashkari: Reasonable to predict December rate cut


U.S. retail sales data due on Tuesday

(Adds graphic and updates prices)

By Brijesh Patel

June 17 (Reuters) - Gold prices slipped on Monday, hurt by higher Treasury yields, while investors awaited more U.S. data and comments from Federal Reserve officials throughout the week for more cues on the outlook for monetary policy.

Spot gold was down 0.8% at $2,315.14 per ounce as of 12:33 p.m. ET (16:33 GMT). U.S. gold futures fell 0.8% to $2,330.10.

"There's really a lack of major fresh fundamental news, so the gold market is looking to the outside markets for direction," said Jim Wyckoff, senior market analyst at Kitco Metals.

"Gold prices are probably going to grind sideways between $2,300 and $2,400 until the next major fundamental catalyst occurs, which may not occur until sometime in July."

The U.S. 10-year Treasury yields ticked higher after falling sharply last week, making non-yielding bullion less attractive for investors.

Traders are keeping a close watch on upcoming comments from New York Fed President John Williams, Philadelphia Fed President Patrick Harker and Fed Governor Lisa Cook.

Minneapolis Fed President Neel Kashkari said on Sunday it's a "reasonable prediction" that the U.S. central bank will cut interest rates once this year, waiting until December to do so.

Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

The release of U.S. retail sales data on Tuesday, weekly jobless claims on Thursday and flash purchasing managers' indices on Friday could offer more clarity on consumption and economic strength.

"Back-to-back weaker-than-expected inflation prints, along with the less hawkish details of the FOMC (Federal Open Market Committee) meeting, have seen appetite for gold increase," Ryan McKay, senior commodity strategist at TD Securities, said in a note.

"However, with that said, plenty of uncertainty remains regarding timing of expected cuts, and macro positioning's beta to data surprises will remain elevated in the near term."

Spot silver slipped 0.9% to $29.26 per ounce, platinum gained 0.9% to $966.05 and palladium dropped 0.1% to $886.91.

(Reporting by Brijesh Patel and Anmol Choubey in Bengaluru; Editing by Paul Simao and Vijay Kishore)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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