As markets examine the Fed's rate outlook, gold remains dormant in early trade

6 Jul 2023 , 12:23 PM

As investors absorbed the minutes from the Federal Reserve’s most recent meeting and prepared for a flood of economic data that might affect the direction of the U.S. central bank’s policies, gold prices were unchanged in early Asian trade on Thursday.

The spot price of gold was $1,917.09 per ounce. To $1,923.60, U.S. gold futures saw a 0.2% decline.

According to the minutes of the June meeting, a united Fed decided to hold interest rates unchanged in order to gain time and determine whether additional rate hikes would be necessary.

Federal Reserve Bank of New York President John Williams stated on Wednesday that the central bank made the right decision in keeping rates unchanged three weeks ago, though he did make a suggestion that at some point, rates may need to be increased once again.

The majority of investors continue to anticipate a rate increase from the central bank at its meeting later this month.

As the opportunity cost of storing non-yielding bullion increases, rising U.S. interest rates have a significant impact on the price of gold.

Before Friday’s non-farm payrolls report, investors will be paying close attention to the Job Openings and Labour Turnover Survey, or JOLTS, from the U.S. Labour Department and the jobless claims from ADP on Thursday.

The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust, said that its holdings decreased 0.44% to 917.86 tonnes on Wednesday from 921.90 tonnes on Monday, a sign of sentiment.

Traders also closely followed developments about China’s export restrictions on semiconductor metals as it intensified its tech war with the United States prior to Treasury Secretary Janet Yellen’s visit to Beijing.

Meanwhile, palladium dropped 0.5% to $1,253.31 and spot silver increased 0.2% to $23.1444 per ounce. At $915.43, platinum was unchanged.

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