Spot gold and silver prices were higher in late U.S. trading Tuesday, as Treasury yields eased from multi-decade highs and the U.S. dollar pulled back, giving metals room to extend their post-payroll rebound.
Western sanctions have upended traditional gold flows, with Russian bullion that would normally go to London now pouring into Hong Kong at a record pace on its way to mainland China and other Asian markets.
For the last four years, central bank demand has transformed the gold market, providing a critical pillar of support for prices. Even if official demand continues to slow, reserve managers are increasingly viewing the precious metal as a strategic asset that can protect against geopolitical uncertainty, financial market instability and declining confidence in traditional reserve assets.
Although gold is recognized as an essential monetary asset, it is also a dead asset, just sitting on a ledger; however, the tokenization of the precious metal could increase its utility, attracting more capital to the space, according to experts at the London Bullion Market Association's annual Global Precious Metals Conference
Central banks maintained the strong monthly pace of gold allocation to their reserves in August, with the Chinese, Uzbek and Polish central banks leading all sovereign buyers, while other banks repatriated or transferred their sovereign bullion to new vaults, according to Marissa Salim, Senior Research Lead, APAC at the World Gold Council (WGC).
Spot gold and silver prices are higher in early U.S. trading Tuesday, as long-dated Treasury yields eased from Monday's multi-decade highs and oil fell below $100 a barrel, giving metals room to extend their post-payroll rebound.
Spot gold bounced from $4,103.52 as long-term yields eased, but the 10-year near 5.27% and December hike odds keep the main trend under pressure.
Gold made a subdued start in Asia as high bond yields offset pared-back rate-hike expectations.
Spot gold prices were little changed and spot silver prices were firmer in late U.S. trading Monday, as fading October Federal Reserve rate-hike expectations supported metals while a stronger dollar and long-dated Treasury yields near multi-decade highs capped gold's rebound.
The traditional relationship between gold and bond yields is being challenged as mounting government debt, persistent inflation and concerns about the long-term purchasing power of fiat currencies continue to fuel the debasement trade, according to market experts speaking at the London Bullion Market Association's annual Global Precious Metals Conference.
Gold's role in the global monetary system could become even more significant as geopolitical uncertainty, rising sovereign debt and concerns about financial sanctions push central banks to diversify their reserves, according to Joachim Nagel, President of the Deutsche Bundesbank.
The U.S. service sector declined more than expected last month, according to the latest data from the Institute for Supply Management (ISM).The ISM announced on Monday morning that its Services Purchasing Managers Index came in at 54.9 in September, down from 55.4 in August. The data was slightly worse than expected, as economists were looking for a reading of 55.