Gold prices varied during these moments of trading, today, Thursday, as gold futures contracts are stable, while spot contracts rise, in conjunction with the decline in the dollar index.
Today, investors are awaiting a group of US economic data, including preliminary employment data on ADP, unemployment benefits, job opportunities (JOLTs) and the purchasing managers’ index, which could affect the course of the Federal Reserve’s policy, after the minutes confirmed expectations that interest rates may remain higher for a while. longer.
Gold and the dollar now
Gold futures settle at $1927 an ounce.
While spot contracts rose by 1920 dollars an ounce, by 0.29%.
On the other hand, the dollar index fell by 0.13% to 102.900 points.
Gold at the settlement of trading yesterday
Gold prices fell at the settlement of trading, yesterday, Wednesday, after the release of US industrial data.
The US Census Bureau data showed that factory orders rose by 0.3% in May on a monthly basis, which was less than expectations for an increase of 0.8%.
According to Reuters, manufacturing, which represents about 11.1% of the economy, is facing challenges with the impact of the increase in interest rates that limited consumer and investment spending, as previous data showed a contraction in the manufacturing sector, as the Industrial Purchasing Managers’ Index of the Institute for Supply Management fell in June, marking the eighth month. Respectively below the boundary between growth and contraction at 50 points.
Upon settlement, gold futures for August delivery fell 0.1%, or $2.4, to $1927.1 an ounce.
Federal minutes
Yesterday's minutes showed that the Fed agreed to keep interest rates steady at its June meeting as a way to buy time and assess whether further interest rate increases are needed. Where it was emphasized that the recent halt in raising interest rates is a temporary stop and does not mean the end of the interest rate hike journey.
The Fed's minutes revealed that some members believed that raising the interest rate by 25 basis points at the meeting last June was the best option, but in the end everyone agreed to stop raising the interest rate to fix it at 25 basis points.
Almost all Fed officials at their June meeting indicated the possibility of further tightening, but at a slower pace than the rapid increases that have characterized monetary policy since early 2022.
And investors are now pricing in an 89% chance of a 25 basis point rate hike in the Federal Reserve in July.
Spot gold may retest the support at $1914 an ounce, with the possibility of breaking this level and dropping to the $1903-$1909 range, according to Reuters technical analyst Wang Tao.
China crisis developments
Dealers are also closely watching developments regarding Chinese restrictions on the export of two minerals critical to the semiconductor industry ahead of US Treasury Secretary Janet Yellen's visit to Beijing on Thursday.
Further escalation on that front after the meeting with Yellen could put market participants on the defensive, which could push some near-term safe-haven flows into gold, said Ip Gong Rong, market strategist at IG.
