For his part, Matt Simpson, chief market analyst at City Index, told Reuters: “The strong economic data (in the United States) lifted the dollar and brought gold back to its lowest levels in June last night.”
The data released on Tuesday indicated that the US economy remains strong, which may prompt the Federal Reserve to raise interest rates again to curb inflation.
According to the Fed Watch service of the (CME) group, investors expect 77 percent of interest rates to be raised in July, and to cut them from March 2024 onwards, and most major US banks expect to raise the interest rate by 25 basis points.
High interest rates discourage investment in gold, which does not yield a return.
Simpson also indicated that gold may not witness any significant movements after the personal consumption expenditures data unless the consumer price index witnesses any sudden movements, explaining that the Federal Reserve may maintain its hawkish policy to tame inflation because it is still much higher than the central bank’s target of 2. percent.
The Fed will publish the minutes of its meeting on June 13th and 14th on July 5th, while it will hold meetings of the Federal Open Market Committee on interest rates on the 25th and 26th of the same month.
Investors are eagerly awaiting the personal consumption expenditures price index data for May, which will be released on Thursday, in addition to other data.
Powell will speak to the Monetary Policy Committee on Wednesday ahead of an ECB forum.
The change in prices
By 0524 GMT, spot gold rose 0.1% to $1915.45 an ounce, hovering near its lowest level since March 16 at $1910 an ounce. US gold futures settled at $1924.60 an ounce.
As for other precious metals, spot silver rose 0.2 percent to $22.93 an ounce. Platinum also fell 0.9 percent, to $916.83 an ounce. Palladium fell 1.1 percent to $1,281.48 an ounce.
#economic #data #raises #dollar #returns #gold #lowest #level #months