Gold heads for weekly rise on hopes Fed will delay rate hikes
US gold futures hold steady as dollar index stays close to previous session’s lows
09 June 2023 - 07:26
byArundhati Sarkar
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Bengaluru — Gold prices edged lower on Friday after climbing more than 1% in the previous session, though hopes of a likely pause on interest rate hikes by the US central bank kept bullion on track for a weekly gain.
Spot gold was down 0.2% to $1,964.79/oz by 3.04am GMT, but headed for a 0.9% weekly rise. US gold futures held steady at $1,979.80. The initial jobless claims numbers gave further weight to the case for a June pause from the Fed, and the resulting pullback in treasury yields have allowed the gold price to pop higher, Tim Waterer, chief market analyst at KCM Trade.
The slight pullback is natural after a spike higher in terms of price consolidation and some profit-taking, he added.
The dollar index hovered close to the previous session’s lows. A weaker dollar makes gold less expensive for overseas buyers.
Focus now shifts to the US consumer inflation report for May, due on June 13, ahead of the Fed meeting, which will provide investors with more clarity about the health of the world’s largest economy.
The IMF on Thursday urged the US Federal Reserve and other global central banks to “stay the course” on monetary policy and remain vigilant in combating inflation.
The overall trend in gold remains positive and prices are waiting for another trigger to move higher, said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai.
Markets are pricing in a 71.3% chance of the Fed standing pat next week, after having raised at every meeting since March 2022. Still, the odds of a 25 basis point rate hike in July are now 51%.
Rate hikes raise the opportunity cost of holding non-yielding bullion.
Spot silver rose 0.4% to $24.3387/oz while palladium was up 0.3% to $1,365.39.
Platinum advanced 0.5% to $1,015.48 and was set to snap two consecutive weeks of declines.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold heads for weekly rise on hopes Fed will delay rate hikes
US gold futures hold steady as dollar index stays close to previous session’s lows
Bengaluru — Gold prices edged lower on Friday after climbing more than 1% in the previous session, though hopes of a likely pause on interest rate hikes by the US central bank kept bullion on track for a weekly gain.
Spot gold was down 0.2% to $1,964.79/oz by 3.04am GMT, but headed for a 0.9% weekly rise. US gold futures held steady at $1,979.80. The initial jobless claims numbers gave further weight to the case for a June pause from the Fed, and the resulting pullback in treasury yields have allowed the gold price to pop higher, Tim Waterer, chief market analyst at KCM Trade.
The slight pullback is natural after a spike higher in terms of price consolidation and some profit-taking, he added.
The dollar index hovered close to the previous session’s lows. A weaker dollar makes gold less expensive for overseas buyers.
Focus now shifts to the US consumer inflation report for May, due on June 13, ahead of the Fed meeting, which will provide investors with more clarity about the health of the world’s largest economy.
The IMF on Thursday urged the US Federal Reserve and other global central banks to “stay the course” on monetary policy and remain vigilant in combating inflation.
The overall trend in gold remains positive and prices are waiting for another trigger to move higher, said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai.
Markets are pricing in a 71.3% chance of the Fed standing pat next week, after having raised at every meeting since March 2022. Still, the odds of a 25 basis point rate hike in July are now 51%.
Rate hikes raise the opportunity cost of holding non-yielding bullion.
Spot silver rose 0.4% to $24.3387/oz while palladium was up 0.3% to $1,365.39.
Platinum advanced 0.5% to $1,015.48 and was set to snap two consecutive weeks of declines.
Reuters
Gold Fields signs its first sustainability-linked loan
Gold inches down on firmer dollar despite forecasts of Fed pause
Gold heads for best week since early April
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Gold inches higher as weaker dollar counters Fed rate decision concerns
Under-pressure dollar keeps gold steady
Gold treads water amid uncertainty on Fed’s intentions
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.