Gold Price Movement

Gold prices fell in European trade on Tuesday for the first time in six days off record highs on active profit-taking.

Factors Affecting Prices

Prices are pressured by the dollar’s spike in recent days, in addition to gains by US treasury yields following strong US inflation data, which reduced the odds of a Fed interest rate cut in June.

Prices

Gold prices fell 0.25% today to $2246 an ounce, with a session-high at $2259. Gold prices rose 0.8% on Monday, the fifth profit in a row, marking a fresh record high at $2265 an ounce on strong haven demand.

The Dollar's Impact

The dollar index rose 0.15% on Tuesday on track for the fifth profit in a row, hitting a five-month high at 105.10 against a basket of major rivals. A stronger dollar makes greenback-denominated gold futures costlier to holders of other currencies.

US Treasury Yields

US 10-year treasury yields rallied by 0.4% to a two-week high at 4.337%, underpinning the dollar further.

US Data Insights

The US manufacturing PMI tipped into growth in March at 50.3, the best reading since October 2022, and passing estimates of 48.5. The gains reflect increasing orders and improving growth inside the US during the first quarter of the year.

US Interest Rates

Following the data, the odds of a US interest rate cut at the June Federal Reserve meeting fell from 70% to 63%. Traders are still pricing in 75 basis points of expected US interest rate cuts this year.

Gold Performance Projections

JPMorgan's analysts foresee gold prices hitting $2500 an ounce this year. Goldman Sachs' analysts project a minimum price target of $2300 an ounce for this year, anticipating policy easing by the Federal Reserve.

The SPDR

Gold holdings at the SPDR Gold Trust fell 3.17 tonnes yesterday to a total of 826.98 tonnes, the lowest since March 13.

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