U.S. inflation focus boosts dollar; Fed rate cuts cap gold prices.
On Monday, the US dollar index briefly rose above the 110 level during trading, reaching a new high since November 2022. However, it quickly gave up all the gains of the day and turned slightly lower, ultimately closing down 0.02% at 109.61. The yield on US Treasury bonds rose slightly, with the benchmark 10-year yield closing at 4.787%; The yield of the two-year US Treasury bond, which is more sensitive to monetary policy, was 4.394%.
Gold prices fell nearly $30 on Monday from a one month high hit last Friday, with a intraday low of $2656.73 per ounce and closing at $2662.83 per ounce. Last week's strong employment report consolidated expectations that the Federal Reserve would cautiously cut interest rates this year, and the US dollar surged to its highest level in over two years. US bond yields hit an eight month high, putting gold prices at the 2700 mark. In addition, a breakthrough in Gaza ceasefire mediation also suppressed safe haven demand for gold.
Due to market expectations, the expansion of US sanctions on Russian oil will force Russian oil buyers to seek alternative supplies. WTI crude oil rose by over 2% at one point, but gave up some of the gains in the late trading session, ultimately closing up 1.97% at $77.31 per barrel; Brent crude oil ultimately closed up 1.21% at $80.15 per barrel.
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