Gold prices staged a modest rebound Tuesday morning, as the yellow metal attempted to recover from its sharpest daily fall in more than a year.
August gold GCQ19, +0.54% was trading 0.3% higher at $1,393.40 an ounce, after the precious metal dropped $24.40, or 1.7%, on Monday, representing the steepest dollar and percentage decline for most-active futures contracts since June 2018, according to FactSet data.
Gains for bullion came as the dollar weakened, making commodities priced in the metal more attractive to buyers using other currencies and as benchmark debt yields edged back. The Reserve Bank of Australia cut its benchmark interest rates for the second time in less than 30 days to combat signs of sluggish economic growth in the region, emanating from China.
The ICE Dollar Index DXY, -0.14% a gauge of the greenback against major currencies, was off 0.1% on Tuesday at 96.75.
The 10-year Treasury note TMUBMUSD10Y, -0.64% was yielding 2.01%, sliding back from Monday’s levels. Lower rates can underpin demand for gold which doesn’t offer a yield.
Stephen Innes, managing partner at Vanguard Markets in Singapore, said “gold remains supported by the weaker global growth outlook and the lower for longer interest rate narrative, but there is not a lot of excitement today as the market feels battered and bruised after the post G-20 beatdown,” writing in a daily research report.
Risk assets received a modest boost on Monday after President Donald Trump and Chinese leader Xi Jinping reached a detente over the weekend at a G-20 gathering in Japan, bringing about a pause to a long-running dispute between the world’s largest economies, which had undercut appetite for stocks and supported a flight to assets perceived as safe.