Gold steadies as higher yields offset soft dollar

Gold prices held steady on Monday as rising US Treasury yields countered support from a weak US dollar, while the Federal Reserve’s recent hint at a slower pace of rate cuts in 2025 kept investors keenly awaiting a slew of economic data due this week to shed more light on that view.

Spot gold was little changed at $2,639.90 per ounce by 11:50 a.m. ET (1650 GMT). US gold futures were down 0.1 per cent at $2,651.30.

“Bond yields are back up again, placing pressure on gold,” said Nitesh Shah, commodity strategist at WisdomTree.

However, “reports of Trump aides exploring tariff plans that are not as aggressive as initially thought have helped the US dollar basket depreciate by close to one per cent,” Shah said.

Yield on the 10-year US Treasury Note rose to an over one-week high, making non-yielding gold less attractive, while the dollar index slumped one per cent, making gold cheaper for overseas buyers.

The Fed’s latest projections in December implied a shift to a more cautious pace of rate cuts this year, with the majority of the policymakers expressing concern that inflation could reignite.

Spot silver gained 1.7 per cent to $30.12 per ounce, platinum lost 0.5 per cent to $933.35 and palladium added 0.1 per cent to $923.28.