Dollar nears two-month high
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US 10-year yields at two-week peak
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Fed’s Bowman reiterates holding rates steady ‘for some time’
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US PCE data due on Friday
(Updates prices)
By Brijesh Patel and Daksh Grover
June 26 (Reuters) – Gold prices slipped 1% to their lowest level in more than two weeks on Wednesday, weighed by a stronger dollar and higher bond yields, while traders looked forward to U.S. inflation data due later this week.
Spot gold was down 0.8%, at $2,301.16 per ounce by 2:03 p.m. ET (1803 GMT), its lowest since June 10.
U.S. gold futures settled 0.8% lower, at $2,313.2.
“At this point, market may very well be responding to the firmer U.S. dollar and we continue to price in the possibility that the U.S. Federal Reserve is unlikely to move (interest rates) earlier in the summer,” said Bart Melek, head of commodity strategies at TD Securities.
The dollar rose 0.4% to a near two-month peak against its rivals, making gold more expensive for other currency holders, while benchmark U.S. 10-year yields hit a near two-week high.
The focus this week will be on the U.S. Personal Consumption Expenditures Price Index, the Fed’s preferred inflation gauge, which could shed light on the central bank’s interest-rate path.
Also on the radar are U.S. first-quarter gross domestic product estimates and a crucial debate between President Joe Biden and Republican rival Donald Trump on Thursday.
Data out on Tuesday showed U.S. consumer confidence eased in June amid worries about the economic outlook, but households remained upbeat about the labor market and expected inflation to moderate over the next year.
Fed Governor Michelle Bowman said on Tuesday that holding the policy rate steady “for some time” would probably be enough to bring inflation under control, but reiterated a willingness to raise borrowing costs if needed.
Higher interest rates increase the opportunity cost of holding non-yielding bullion.
Elsewhere, spot silver lost 0.1% to $28.88 per ounce, palladium slipped 2%, to $929.25, while platinum climbed 3.1%, to $1,011.88. (Reporting by Brijesh Patel and Daksh Grover in Bengaluru; Editing by Maju Samuel and Pooja Desai)
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Published: 26 Jun 2024, 11:53 PM IST
### Additional Insight:
– The article mentions the possibility of the U.S. Federal Reserve not moving interest rates earlier in the summer, which can impact the trajectory of gold prices in the coming weeks.
– The focus on the U.S. Personal Consumption Expenditures Price Index and upcoming economic data releases underscores the importance of fundamental indicators in shaping market sentiment.
– Fed Governor Michelle Bowman’s comments on inflation control and potential rate hikes provide clarity on the Fed’s monetary policy stance, which is crucial for investors assessing the future movement of gold prices.
– The dynamic shifts in silver, palladium, and platinum prices highlight the broader trends in the precious metals market and the diverse factors influencing their valuation.
