The price of gold fell by 0.3%, continuing yesterday's decline, which was caused by the positive dynamics of the US currency and rising yields on US Treasury bonds.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.11% to 105.66.
Meanwhile, the yield on 5-year Treasury bonds rose by 2.3 basis points, reaching 4.524%, while the yield on 30-year bonds was 4.665% (+3.3 basis points). The yield on 2-year Treasury bonds, reflecting expectations of short-term interest rates, increased by 1.0 basis points to 4.853%, while the yield on 10-year bonds rose to 4.51% (+2.7 basis points).
Investors are also waiting for US data that will help clarify the prospects for easing the Fed's monetary policy. Later today, a weekly report on the initial jobless claims will be released (economists expect an increase to 212 thousand from 208 thousand a week earlier), and tomorrow the Reuters/Michigan consumer sentiment index for May will be published (consensus estimates suggest a decrease in the index to 76.0 from 77.2 in April). Meanwhile, US inflation data will be released next week. Traders will watch for signs that inflation has resumed its downward trend toward the Fed's 2% target rate. Following recent weak US employment data, money markets expect the Fed to reduce borrowing costs by about 40 basis points by the end of 2024, which implies about two 0.25% rate cuts. Lower interest rates reduce the opportunity cost of holding bullion. Experts said that if the U.S. inflation report comes hotter than gold prices could fall to $2,290