19 Jul 2023 , 11:18 AM
Even as investors bet that recent U.S. economic readings support a halt in the Federal Reserve’s interest rate-hiking stance, gold prices declined on Wednesday from a 1-1/2-month high hit in the previous session.
Spot gold was down 0.1% at $1,978.09 per ounce after rising to its highest level since May 24 on Tuesday at $1,984.19 per ounce.
Gold futures in the US were unchanged at $1,981.60.
The dollar index fluctuated just above a one-year low.
Compared to the 0.5% projected by economists surveyed by Reuters, U.S. retail sales grew 0.2% in June, less than expected. However, it seemed like consumer spending was strong.
At $1,981.60, US gold futures were steady. The dollar index varied barely above its yearly low.
U.S. retail sales increased by 0.2% in June, less than the 0.5% forecasted by economists surveyed by Reuters. But it appeared as though consumer spending was robust.
According to economists surveyed by Reuters, the Fed will boost its interest rate by 25 basis points to a range of 5.25%–5.50% on July 26. The majority of them believe that this will be the final hike of the current tightening cycle.
When interest rates are lower, storing non-yielding bullion has lower opportunity costs.
The shares of large U.S. banks rose on Tuesday as they revealed that higher interest rates had contributed to better profits in the second quarter. However, the prognosis for the sector may be clouded by a slowdown in consumer spending, slower loan growth, and higher deposit costs.
The Reuters Tankan survey revealed on Wednesday that big Japanese manufacturers’ confidence declined in July for the first time in six months, a hint of mounting exporter anxiety over deteriorating global demand.
Palladium dropped 0.2% to $1,317.16, platinum rose 0.2% to $984.42, and spot silver dropped 0.1% to $25.06 per ounce.
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