Gold Remains Steady Despite a Strong Dollar and Rising Bond Yields
Gold held steady on Monday despite a notable rise in the US Dollar Index,
which reached its highest level in two months, and an increase in US Treasury yields to their highest levels in over a year.
This came alongside heightened expectations regarding the Federal Reserve’s policy,
especially after strong labor market data from the US.
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Gold
Despite the pressures stemming from a stronger dollar and higher bond yields,
gold remained stable, supported by its appeal as a safe haven amid uncertainties surrounding
the trade policies of the new US administration led by Donald Trump.
Expectations of potential trade wars and rising inflation rates have bolstered gold’s attractiveness as a hedging instrument.
United States
- Impact of US Labor Market Data:
Improvements in the US labor market during December have bolstered expectations
of the Federal Reserve slowing its rate-cutting trajectory.
This has increased the probability of holding rates steady at the January meeting,
influencing broader market movements. - Anticipation of Inflation Data:
Investors are closely watching US inflation data this week,
with expectations that the Consumer Price Index will accelerate to 2.9% year-on-year in December.
This could increase pressure on the Federal Reserve to maintain a cautious monetary policy in the near term. - Gold Amid Challenges:
Despite economic and political pressures, gold remains supported by growing demand as a safe haven.
This resilience reflects its strength in withstanding short-term market fluctuations amid ongoing global uncertainties.
Gold Remains Steady Despite a Strong Dollar