Gold prices edged up on Wednesday as the U.S. dollar weakened, while investors awaited the release of minutes from the Federal Reserve’s most recent policy meeting for indications on the timing of potential interest rate cuts.
Fundamentals
* Spot gold increased by 0.1% to $2,331.41 per ounce, while U.S. gold futures rose by 0.3% to $2,340.50.
* The decline in the U.S. dollar made gold more affordable for buyers using other currencies.
* Federal Reserve Chair Jerome Powell remarked that the U.S. is headed towards less inflation, but stressed the necessity of additional data before adjusting interest rates to confirm that recent low inflation readings accurately represent the state of the economy.
* Lower interest rates make holding non-yielding gold more attractive.
* Traders are currently factoring in a 67% probability of a Fed rate cut in September, as per the CME FedWatch Tool.
* Data revealed that job openings in the U.S. rose in May after sharp declines in the previous two months, though the trend still indicated a softening labor market.
* The minutes from the Fed’s June policy meeting are slated for release at 1800 GMT. Other employment data expected later in the week include ADP employment, weekly jobless claims, and non-farm payrolls on Friday.
* Spot silver climbed by 0.2% to $29.56, platinum increased by 0.6% to $996.64, and palladium dropped by 0.8% to $978.80.
* Impala Platinum in South Africa reported a strike at part of its Bafokeng operations in Rustenburg, predominantly involving contractors seeking permanent positions.
Data/Events (GMT)
0145 China Caixin Services PMI June
0750 France HCOB Serv, Comp PMIs June
0755 Germany HCOB Services PMI June
0755 Germany HCOB Comp Final PMI June
0800 EU HCOB Serv, Comp Final PMIs June
0830 UK S&P Global PMI: Comp – Output June
0830 UK Reserve Assets Total June
1230 US International Trade May
1230 US Initial Jobless Clm Weekly
1345 US S&P Global Comp, Svcs Final PMIs June
1400 US Factory Orders MM May
1400 US ISM N-Mfg PMI June
1800 US Federal Open Market Committee issues minutes from its meeting of June 11-12
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Rashmi Aich)
Additional Insight:
It is worth noting that the fluctuation in gold prices is often influenced by various factors, including economic data, geopolitical tensions, and the overall market sentiment. Investors closely monitor central bank decisions and economic indicators to gauge the future direction of gold prices. Additionally, strikes or labor disputes in mining regions can impact the supply of precious metals, leading to potential price fluctuations in the market.
