Gold firms with focus on Fed meeting; US 5-year yield highest since 2007

Gold firms with focus on Fed policy meeting

Gold held near a two-week peak on Tuesday, helped by a pullback in the dollar, although prices were stuck in a narrow range as focus turned to the Federal Reserve’s (Fed’s) policy meeting for updates on the interest rate outlook and economic projections. Spot gold was up 0.1 per cent at $1,934.10 per ounce at 18.26 IST after hitting its highest since September 5 earlier in the session. US gold futures gained 0.2 per cent to $1,956.80.

The dollar index eased from a six-month peak against its rivals, making gold less expensive for other currency holders. Investors will be looking out for updated forecasts from Fed officials at the end of a two-day policy meeting on Wedn­esday, after a recent raft of strong US economic data reduced recession fears. Traders expect a 99 per cent chance of the Fed leaving rates unchanged at the end of its meeting, with a 35 per cent probability of another rate hike before 2024, according to the CME’s FedWatch Tool.

Reuters 

At 4.5%, US five-year yield highest since 2007

The US five-year yield rose to the highest level since 2007 after hotter-than-anticipated inflation data in Canada added to global concerns about resurgent price pressures.

The five-year Treasury yield rose as much as 5.5 basis points (bps) to 4.5044 per cent, exceeding its 2022 high and climbing to the highest since August 2007. Other Treasury tenors approached their 2023 highs, with the 10-year coming within a basis point (bp) of its August, 22 peak of 4.36 per cent. 

Canadian yields surged, with the two and 10-year tenors reaching multi year highs, as traders priced in higher odds of another interest-rate increase by the country’s central bank. A report showed the domestic inflation rate accelerated by more than expected for a second straight month.  Bloomberg