Gold frail as dollar, yields dim shine

Jan 16 (Reuters) – Gold prices were subdued on Tuesday as the dollar and Treasury yields rose, while traders waited to hear from a slew of US Federal Reserve speakers this week for more clarity on the central bank’s rate cut prospects.

Spot gold was down 0.3% at USD 2,048.70 per ounce, as of 0758 GMT. US gold futures rose 0.1% to USD 2,053.00.

The dollar has strengthened ahead of Christopher Waller’s speech, which is arguably the bigger event for the week, said Matt Simpson, a senior analyst at City Index.

The dollar index touched a 10-day high, making bullion less attractive for other currency holders, while yields on benchmark US 10-year Treasury notes rose above 4%.

At least six Fed officials are due to speak this week, with Governor Christopher Waller scheduled to deliver a speech on the economic outlook before the Brookings Institution at 1600 GMT.

“With multiple rate cuts having been priced in by market, I wouldn’t be surprised if Waller feels inclined to push back…a move back to USD 2035 (for spot gold) could be plausible,” Simpson said.

At the end of its Jan. 30-31 meeting, the US central bank is expected to hold its policy rate steady.

Traders are betting on six rate cuts of 25 basis points each this year, with about a seven-in-ten chance that the first one could come as soon as March, according to LSEG’s interest rate probability app, IRPR.

Lower interest rates increase non-yielding bullion’s appeal.

Elsewhere, European Central Bank officials pushed back against market expectations for rapid rate cuts this year.

According to Reuters technical analyst Wang Tao, spot gold may retrace to USD 2,042 per ounce, after its repeated failures to break resistance at USD 2,060.

Spot silver fell 0.3% to USD 23.13 per ounce, platinum declined 0.7% to USD 908.59, and palladium slipped 0.8% to USD 963.38.

(Reporting by Harshit Verma in Bengaluru; Editing by Subhranshu Sahu, Rashmi Aich and Sohini Goswami)