Gold prices fell Thursday after traders weighed in on Federal Reserve officials’ updated projections for interest rates, which signaled just one U.S. rate cut this year.
FUNDAMENTALS
* Spot gold was down 0.5% at $2,311.50 per ounce at 0134 GMT. U.S. gold futures fell 1.2% to $2,327.20.
* The dollar strengthened 0.1%, making the price of green gold less attractive to holders of other currencies, while the yield on the benchmark US 10-year bond rose…
* The US Fed held interest rates on hold on Wednesday, while policymakers indicated they expect to cut rates only once in 2024.
* Lower interest rates reduce the opportunity cost of holding unprofitable bullion.
* Fed Chair Jerome Powell said the Fed’s inflation outlook is “a fairly conservative forecast” that may not be borne out by future data and is subject to revision.
* Powell added that the better-than-expected consumer price index inflation data was welcomed by officials.
* The headline consumer price index remained flat on a monthly basis in May, below expectations for a 0.1% increase. Core prices rose 0.2%, also below economists’ forecasts for a 0.3% increase.
* Gold’s meteoric rally to consecutive all-time highs shows every sign of continuing into the second half of 2024, as the fundamental case for gold remains firmly in place, even if $3,000 per ounce seems just out of reach, traders and industry experts said.
* China’s consumer inflation held steady in May as the decline in producer prices eased, but the underlying trend suggests Beijing needs to do more to support weak domestic demand and an uneven economic recovery .
* China is the industry’s largest official gold buyer.
* Spot silver fell 2.6% to $28.94 an ounce, platinum fell 1.6% to $950.50 and palladium lost 1% to $897.25 .
DATA/EVENTS (GMT) 1230 US Initial Jobless Clm Weekly 1230 US PPI Machine Manuf’ing May (Reporting by Sherin Elizabeth Varghese in Bengaluru; Writing by Sherry Jacob-Phillips)
