As investors evaluate US statistics and Fed rate signals, gold remains flat

16 Jun 2023 , 11:43 AM

On Thursday, gold hit a three-month low before recovering to close higher as U.S. economic data provided some relief from the Federal Reserve’s ‘hawkish pause’ on interest rates.

Spot gold was unchanged at $1,959.03 per ounce. The price of U.S. gold futures remained stable at $1,971.50.

Despite the fact that U.S. jobless claims were higher than anticipated, other statistics revealed that industrial output fell by 0.2% in May, falling short of forecasts for a 0.1% increase.

In the previous session, the 10-year Treasury yield fell, bolstering demand for bullion with no interest bearing as the dollar index fell to a one-month low.

The Fed maintained its policy rate on Wednesday, but new predictions suggested that borrowing costs may still need to increase by as much as half a percentage point by year’s end.

Following its eighth consecutive rate increase, the European Central Bank also hinted at possible future rate increases.

As the second half of the year approaches, money managers are in need of guidance after hawkish central banks delivered a loud ‘no’ to markets wagering the recession will prompt rate reduction shortly.

Gold with no yield has less attraction due to high interest rates.

Despite higher-than-anticipated inflation, it is believed that the Bank of Japan would maintain its ultra-accommodative monetary policy in order to assist the country’s weak economic recovery in the face of a dramatic downturn in global development.

Platinum increased by 0.2% to $987.47, and spot silver increased by 0.2% to $23.8924 per ounce. However, each was doomed to a weekly loss. To $1,396.08, palladium decreased by 0.3%.

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