Gold prices fell globally during these moments of trading, today, Thursday, in conjunction with the rise of the US dollar, as the rise of the dollar makes gold more expensive for holders of other currencies, which reduces demand.
Despite the decline in gold prices, bullion remained near record highs as traders await more economic data from the United States that could boost hopes of a mid-year interest rate cut by the Federal Reserve.
Investors are awaiting US retail sales data, the producer price index report and jobless claims due later in the day to gauge the state of the US economy and whether that will prevent the Federal Reserve from cutting interest rates in June.
“There was a slight pullback in gold prices after the US CPI data came out, but the data did not change the market’s view much on US monetary policy,” said Kelvin Wong, senior market analyst for Asia Pacific at OANDA. “As for today’s PPI data, if the core annual PPI reading comes in close to expectations, I still think gold could remain supported.”
The Fed is due to release its latest interest rate forecasts at its policy meeting next week. Its December meeting had forecast a three-quarter-point rate cut by 2024.
The US interest rate tracking tool available on the Investing Saudi website showed that markets expect the Federal Reserve to keep interest rates unchanged during the March and May meetings by 99% and 93% respectively, while investors’ expectations for the central bank to begin reducing borrowing costs in June rose to 63.9% compared to 55.2% a week ago.
Other catalysts that could move gold prices could be further bad news on China’s housing market and consumer demand trends, said Nicholas Frabel, global head of institutional markets at ABC Refinery. Frabel expects official sector demand to remain supportive of gold prices this year.
Gold at settlement yesterday
Gold futures prices turned higher at the settlement of trading yesterday, Wednesday, after ending an eight-session winning streak yesterday following the release of the US consumer price report.
At settlement, gold futures for April delivery rose 0.7%, or $14.7, to $2,180.8 an ounce, after touching $2,161.3 during yesterday's session.
Gold and dollar now
Gold futures are now down 0.4% at $2,172 an ounce.
While spot gold contracts fell by about 0.26% to $2,168 per ounce.
On the other hand, the US dollar index is now up 0.11% at 102.515 points.
Other minerals
Spot platinum fell 0.3% to $935.50 an ounce, while palladium fell 0.3% to $1,056.24.
Silver fell 0.3% to $24.95, after hitting its highest level in more than four months earlier in the session.
