Gold Rises as Dollar and US Treasury Yields Decline

Gold prices increased today, Tuesday, supported by a decline in the dollar and US Treasury yields, as investors await the release of inflation data for December this week, which may influence the Federal Reserve’s (US central bank) decision to raise interest rates sooner than expected. The spot gold price rose 0.3% to $1,806 per ounce by 02:32 GMT. Meanwhile, US gold futures increased 0.3% to $1,804.90. Yields on 10-year US Treasury bonds fell to 1.778%, down from a two-year high of 1.808% reached in the previous session. Investors are now looking forward to the inflation data set to be released tomorrow, Wednesday. The data is expected to show the core consumer price index in the US rising to its highest level in decades at 5.4% in December, up from 4.9% in the previous month. Some investors view gold as a hedge against high inflation, but it is sensitive to rising US interest rates that increase the opportunity cost for holders of the non-yielding yellow metal, while a stronger dollar makes the precious metal more expensive for holders of other currencies. In other precious metals markets, the spot silver price rose 0.4% to $22.55 per ounce, platinum increased by 1% to $949.28 per ounce, and palladium climbed 0.5% to $1,921.74.