Gold Hovers Below Record Peak as US Dollar, Yields Firm after Upbeat Data

Marked ingots of 99.99 percent pure gold are placed in a cart at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia March 10, 2022. REUTERS/Alexander Manzyuk/File Photo

Gold prices on Tuesday hovered below a record high hit in the previous session, as the dollar and Treasury yields held firm after strong US data flagged doubts on whether the Federal Reserve would deliver three interest rate cuts this year.
Spot gold rose 0.5% at $2,261.69 per ounce, as of 0816 GMT, holding below the all-time high of $2,265.49 hit on Monday. US gold futures gained 1.2% to $2,283.20.
"Gold notched up a new record price, though with that high watermark also came some overbought conditions, which have resulted in a mild pullback. However, recent pullbacks in gold have been shallow in nature due to potential buyers waiting on the sidelines for better entry points," said Tim Waterer, chief market analyst at KCM Trade.
Bullion's gains were held in check as the dollar hit a 4-1/2-month high and the benchmark US 10-year Treasury yields were trading near their highest levels in two weeks after data showed US manufacturing grew for the first time in 1-1/2 years in March.
Traders pared bets of a June interest rate cut to 61% after the data, according to the CME Group's FedWatch Tool.
Fed Chair Jerome Powell on Friday indicated the latest US inflation data did not undermine the central bank's baseline outlook, but said with the economy on a strong footing, "that means we don't need to be in a hurry to cut".
"Traders will be casting an eye towards Friday's US nonfarm payrolls release, because if we happen to see another strong jobs report this could provide a catalyst for a gold pullback," Waterer said.
Gold tends to gain when interest rates are cut as it reduces the opportunity cost of holding bullion.
Elsewhere, spot silver rose 2.3% to $25.66 per ounce, platinum was up 1.1% at $911.36 and palladium climbed 1.7% to $1.013.09.