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Gold prices stumble as strong Treasury yields, dollar bite

Published 12/11/2024, 04:48
Updated 12/11/2024, 20:50
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Investing.com-- Gold prices fell Tuesday, pressured by a climbing Treasury yields and stronger dollar a day ahead of fresh inflation data. 

Spot gold fell 0.8% to $2,599.56 an ounce, while gold futures expiring in December rose 0.4% to $2,606.10 an ounce by 3.43 p.m. ET (2043 GMT). 

Gold pressured by higher Treasury yields, dollar 

The dollar raced to four-month highs this week, while Treasury yields also drifted higher ahead of U.S. consumer price index inflation data, which is expected to show inflation remained sticky in October. The reading is also likely to factor into expectations for interest rates.

Beyond the inflation reading, some Fed speakers have also floated the idea of rate pause should inflation surprise to the upside between now and the December meeting.

"If inflation surprises to upside before December, that might give us pause [on rate cuts]," Minneapolis Federal Reserve Bank President Neel Kashkari said Tuesday.

Traders were seen pricing in a 62.1% chance for another 25 bps cut in December, and a 38% chance rates will remain unchanged, CME Fedwatch showed.

Other precious metals were mixed on Tuesday, but were also nursing recent losses from the Trump trade. Platinum futures fell 1.6% to $954.45 an ounce, while silver futures rose 0.8% to $30.863 an ounce.

Copper sinks, China stimulus underwhelms

Among industrial metals, copper prices retreated on Tuesday, extending recent losses after more fiscal measures in top importer China largely underwhelmed markets.

Benchmark copper futures on the London Metal Exchange fell 1.7% to $9,148.00 a ton, while December copper futures fell 2% to $4.1455 a pound.

China’s National People’s Congress approved 10 trillion yuan ($1.4 trillion) in new debt measures to support local governments. But traders balked at a lack of targeted measures for personal consumption and the property markets, especially in the face of increased trade tariffs under a Trump presidency. 

Still, analysts at JPMorgan (NYSE:JPM) said China was likely to unveil more targeted fiscal measures in the coming months, and that Beijing was likely trying to gauge the ramifications of a Trump presidency.

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