Tuesday’s Large Gains Extend Into Today’s Asia-Pac Dealings

Gold is 0.3% higher in the Asia-Pac session, after some dovish leaning Fed comments and the associated weaker greenback prompted a strong 1.4% rally in the yellow metal on Tuesday.

• US tsys bull-steepened, with yields 3-12bps lower across benchmarks. The driving force was Governor Waller leaning dovish by touting potential cut timings. In the Q&A, Waller suggested that if inflation continues to cool for maybe three to five months, the Fed could lower the policy rate.
• The push to $2040.97 extended bullion’s impressive run to trade at the highest level since May and significantly narrowed the gap with the year’s highs at $2,063.
• Analysts appear to remain bullish on the yellow metal with strategists at BofA, stating they believe gold could finish 2024 at $2,400 per ounce, if earlier Fed rate cuts were to manifest.
• Mining weekly reported that in their recently published Metals and Mining Outlook for 2024, the BofA analysts said that while the war in the Middle East has boosted gold in the near term, “the yellow metal ultimately remains a trade on rates, so once the Fed announces a decisive end to the hiking cycle in 2Q, new buyers should come into the market.”