Title: Gold Up despite Growing Expectations on the Interest Rate Hikes and Rising Yields

Feb 09, 2022 12:11 AM ET

By: AnalysisWatch

Amid continued pressure from US inflation, the gold price gained in Asia on Wednesday morning. However, rising US government bond yields and growing expectations of interest rate hikes by the Federal Reserve kept gains in check.

At 11:45 p.m. ET, gold futures were up 0.03% at $1,828.45 an ounce. The dollar, which normally moves inversely to gold prices, trended slightly lower on Wednesday.

The yield on 10-year US Treasury bonds rose to 1.97% on Tuesday, the highest since November 2019.

Investors are now waiting for inflation data due on Thursday for further clues on the Fed's rate hike timetable. Markets are currently putting the odds at one in three that the Fed will raise rates in March 2022.

San Francisco Fed President Mary Daly said on Tuesday that US inflation could rise even further before recovering.

Across the Atlantic, European Central Bank President Christine Lagarde said on Monday there was no need for all-out tightening as inflation could fall and stabilize, dampening rising expectations of aggressive rate hikes.

In other metals, silver rose 0.4% while platinum and palladium fell 0.2%.