Gold prices down $100 from record-high on uptick in US Treasury yields; Q1GDP lowers Fed rate cut hopes

Gold prices today: The yellow metal trimmed gains on Thursday, April 25, as US Treasury yields rose after gross domestic product (GDP) data showed signs of persistent core inflation, which in turn, lowered expectations of the Federal Reserve cutting interest rates anytime soon. Spot gold firmed 0.3 per cent at $2,321.70 per ounce after rising as much as 0.8 per cent earlier in the session.

Prices were down over $100 from an all-time high of $2,431.29 scaled on April 12, fueled by geopolitical turmoil. Coming to domestic prices, gold futures were last up 0.18 per cent at ₹71,176 on the multi commodity exchange (MCX).

Also Read: US Q1 GDP: At 6.1%, US economy grows at slowest pace in 2 years, misses estimates on sharp uptick in core inflation

US gold futures rose 0.2 per cent at $2,334.40. Spot silver prices declined 0.2 per cent to $27.23 per ounce. Platinum was down 0.2 per cent to $901.10 and palladium lost 1.9 per cent at $982.25, according to news agency Reuters.

What’s hurting the yellow metal?

–US economic growth slowed more than expected in the first quarter, but an increase in inflation suggested the Fed would not cut interest rates before September. US Treasury yields hit more than five-month highs after the data was released.

-Gold is traditionally known as an inflation hedge but elevated interest rates reduce the allure of holding non-yielding bullion. Analysts said that gold is in the midst of a consolidation after weeks of upsurge.

-Analysts added that it that could change in the short term if an inflationary print is seen that comes out very benign and inflation is much more reduced. The March core Personal Consumption Expenditures Price Index (PCE) data is due on Friday.

Also Read: Gold rate outlook: Goldman Sachs raises yellow metal price forecast to $2700 per ounce by year-end

Where are prices headed?

Gold prices found support near 70,700 in MCX and 23,15$ in Comex, leading to a positive outlook with recovery from 70,700 to 71,100, according to analysts. ‘’Market sentiment remains optimistic, with focus on the upcoming US PCE Price Index data scheduled for Friday, April 26. This data release is anticipated to provide further clarity on the direction of gold prices,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.

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