Gold prices held steady on Friday as the U.S. dollar and the benchmark 10-year Treasury yield eased slightly, although bullion was on track for a second-straight weekly loss as traders weighed the timing of Federal Reserve’s interest rate cuts. Investors also focused on inflation data for further hints on the Fed’s interest rate cut strategy. Spot gold (XAUUSD:CUR) was up +0.18% to $2,023.42 by 6 am ET, but down 0.4% for the week so far.
Meanwhile oil prices retreated, but headed for a second weekly gain as strong U.S. economic growth and signs of Chinese stimulus boosted demand sentiment, while Middle East supply concerns added further support. Crude Oil Futures (CL1:COM) dipped -1.03% to $76.56 a barrel by 6 am ET.
“The (U.S) economy remarkably weathered the storm caused by past rate rises and it remains ebullient at the beginning of 2024,” said Tamas Varga at oil broker PVM to Reuters, adding that the Chinese reserves cut is “another welcome development”.
CME Group in an article dated Jan. 25 said, with weather driving heating demand and natural gas prices, El Nino is the thing to watch in 2024, among other factors like OPEC supply, jet fuel rebound.
Hopes of improvement in demand from top consumer China following a raft of policy support also supported base metals, setting them up for a weekly rise. ANZ said, the iron ore market was also swept up in the optimism following the cut to China’s RRR. Futures rallied more than 2% on hopes it would boost activity in the country’s construction sector.
Elsewhere among agriculture metals, soybeans and wheat fell which cocoa futures gained.
