Gold Prices Slip Amid Strong Dollar
Gold prices declined over 1 percent on Friday due to a stronger dollar following a rise in U.S. business activity to a 26-month high in June. This drop in gold prices coincided with a rebound in employment, which supported the rise in the dollar index.
Insight into U.S. Economic Data Impact on Bullion
Looking ahead, investors are eagerly awaiting the release of key U.S. inflation and GDP data later this week to gain more insights into the Federal Reserve’s interest rate cut stance. The first-quarter U.S. GDP estimates are set to be released on Thursday, followed by the personal consumption expenditures (PCE) price index report on Friday.
If the PCE data reveals an increase in inflation, it is possible that gold prices may dip below the $2,300 level. The Federal Reserve is closely monitoring these indicators to assess the economic health and decide on the timing of the next interest rate cut, as lower rates reduce the opportunity cost of holding non-yielding assets like gold.
Additional Comments from Fed Officials
San Francisco Federal Reserve Bank President Mary Daly recently shared her perspective, stating that she believes the central bank should not cut interest rates until policymakers are confident that inflation is on track to reach 2 percent. However, she also acknowledged the growing risk posed by rising unemployment.
Looking Ahead to Other Fed Officials’ Remarks
This week, investors will be paying attention to statements from Fed Governors Lisa Cook and Michelle Bowman, as well as Richmond Fed President Tom Barkin, for further clarity on the central bank’s future actions.
Insight into Other Precious Metals Movement
While gold prices saw a decline, the rest of the metals market experienced mixed movement on Tuesday. Spot silver dropped by 0.38 percent to $29.52, but platinum rose by 0.83 percent to $1,002.65, and palladium gained 1.25 percent to $991.37.
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