Gold advances towards unprecedented peaks

Gold prices rose in European trade on Thursday, resuming gains and moving once again towards record highs. 

The current slowdown in US 10-year treasury yields provided support for non-yielding gold futures, while haven demand underpinned the precious metal as well. 

Prices

Gold prices rose 0.85% to $2381 an ounce, with a session-low at $2370.

Prices lost 0.9% on Wednesday, the second loss in a row on profit-taking off record highs at $2431. 

US Yields 

US 10-year treasury yields fell 0.65% away from recent five-month highs at 4.696%, underpinning non-yielding assets. 

The developments come as markets await more clues on the future of US interest rates this year. 

Fed officials are now more cautious about discussing the timing of the first interest rate cut, with Fed Chair Jerome Powell hinting this week that interest rates could remain high for longer than expected. 

US Rates

The odds of a Federal Reserve interest rate cut in June fell to 15%, while the odds of such a cut in July fell to 41%. 

Now traders await barely two 0.25% interest rate cuts this year by the Fed instead of three rate cuts as previously expected. 

 The SPDR

Gold holdings at the SPDR Gold Trust fell 2.59 tonnes yesterday to a total of 827.59 tonnes, the lowest in a week.