Safe- haven demand and high dollar keep gold steady

Gold prices were steady on Wednesday a er rallying to record highs last week, as safe- haven demand fuelled by geopolitical risks in the Middle East partially o set pressure from higher dollar and treasury yields.

Spot gold held its ground at $ 2,381.68/ oz 3.37am GMT, a er hitting a record high of $ 2,431.29 on Friday. US gold futures fell 0.4% at $ 2,397.70.

The dollar held steady near a fivemonth peak, making the greenbackpriced bullion less attractive for other currency holders. Benchmark US 10year treasury yields were at 4.6591%, hovering near a ve- month high hit in the previous session.

“Gold prices have been displaying resilience in the face of higher treasury yields and a stronger US dollar, while nding some support in safe- haven ows in light of brewing geopolitical risks, with market participants still on edge for Israel’s response to Iran's attacks,” said IG market strategist Yeap Jun Rong.

Any escalation in geopolitical tensions could potentially pave the way for prices to retest its record high levels, Jun Rong said.

Top US central bank o cials including Federal Reserve chair Jerome Powell backed away from providing any guidance on when interest rates may be cut, saying instead that monetary policy needs to be restrictive for longer. Data out of US has stirred questions on the prospects of rate cuts in 2024, with several global brokerages having pushed back their expectation of the US Federal Reserve starting to lower interest rates to September from June. Market is pricing in a 68% chance of a rate cut in September, according to the CME FedWatch Tool.

Lower interest rates boost the appeal of holding non- yielding bullion. Spot silver rose 0.3% to $ 28.16/ oz, platinum fell 0.3% at $ 953.75 and palladium was up 0.4% at $ 1,017.58.