At the same time, recent data on the US labor market has fueled speculation that the Federal Reserve may be forced to reduce interest rates sooner than expected. Jobless claims exceeded expectations, signaling potential economic weaknesses that could push the Fed into softer monetary policy action.
Central Bank reactions and prospects for the price of Gold
Globally, central banks are adjusting their monetary policy. Sweden’s Riksbank recently cut rates for the first time since 2016, and the Bank of England has seen an increase in the number of rate-cutting officials. The European Central Bank also all but guaranteed a rate cut in June, while the Reserve Bank of Australia took a more accommodative tone.
These developments suggest that interest rates may have peaked and may be starting to decline, a favorable condition for the yellow metal. While Fed officials remain cautious, with figures such as the Boston Fed President and Minneapolis Fed President highlighting persistence in inflationary pressures, the global backdrop appears inclined to support further gains for the yellow metal in the coming months.
