May 7 – Gold prices edged up for a second session on Tuesday, after recent economic data boosted bets that the Federal Reserve would cut interest rates later this year.
FUNDAMENTALS
* Spot gold rose 0.2% to $2,327.11 per ounce, as of 0034 GMT. U.S. gold futures firmed 0.2% to $2,336.20.
* Traders are pricing in a 64% chance of a Fed rate cut in September, as per CME’s FedWatch Tool. Lower rates increase the appeal of holding non-yielding bullion.
* Data on Friday showed job growth in the U.S. slowed more than expected in April, while the increase in annual wages fell below 4.0% for the first time in nearly three years.
* Fed Bank of New York President John Williams said on Monday that at some undefined point the U.S. central bank will lower its interest rate target.
* Investors closely monitored the latest developments in the Middle East conflict. Palestinian militant group Hamas on Monday agreed to a Gaza ceasefire proposal from mediators, but Israel said the terms did not meet its demands and pressed ahead with strikes in Rafah while planning to continue negotiations on a deal.
* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.21% to 832.19 tonnes on Monday from 830.47 tonnes on Friday.
* Spot silver fell 0.1% to $27.44 per ounce, platinum gained 0.5% to $958.90 and palladium rose 0.4% to $981.34.
* A private sector survey showed on Monday that China’s services activity expansion slowed a touch, but growth in new orders accelerated and business sentiment rose solidly.
DATA/EVENTS
0030 Japan JibunBK Comp Op Final SA April
0030 Japan JibunBK SVC PMI Final SA April
0130 Australia Retail Trade Q1
0430 Australia RBA Cash Rate May
0600 Germany Industrial Orders MM March
0600 Germany Manufacturing O/P Current Price SA March
0600 Germany Consumer Goods SA March
0600 UK Halifax House Prices MM, YY April
0645 France Reserve Assets Total April
0830 UK S&P Global PMI: MSC Composite Output April
This article was generated from an automated news agency feed without modifications to the text.
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Published: 07 May 2024, 06:24 AM IST
### Market Sentiment Influence
The market sentiment favoring a potential Fed rate cut in September has bolstered the demand for gold as a safe-haven asset, leading to the increase in gold prices for the second consecutive session. This sentiment shift is based on recent economic data showing signs of slowdown in key sectors, prompting investors to hedge against potential economic uncertainties.
### Geopolitical Tensions Impact
Aside from economic data, geopolitical tensions in the Middle East have also played a role in shaping market dynamics. The ongoing conflict between Hamas and Israel has raised concerns about stability in the region, contributing to the attractiveness of gold as a traditional hedge during times of geopolitical instability.
### Continued Investment in Gold-backed ETFs
The increase in holdings of the SPDR Gold Trust indicates continued investor interest in gold as a long-term investment option. Gold-backed ETFs remain a popular choice for investors seeking exposure to gold prices without holding physical bullion, providing a convenient way to capitalize on gold’s price movements.
### Chinese Economic Indicators
The private sector survey revealing a slight slowdown in China’s services activity expansion highlights the interconnected nature of global markets. China’s economic performance can have a significant impact on commodity prices, including gold, making it crucial for investors to monitor key economic indicators from major economies like China to make informed investment decisions.
