Gold rebounds from its 5-month lows in early trade

18 Aug 2023 , 09:06 AM

On Friday, the U.S. dollar and bond rates experienced a modest decline from their highs, and gold saw a slight increase from its 5-month lows. However, bullion was projected to undergo its fourth consecutive week of decrease due to concerns surrounding the Federal Reserve’s anticipation of higher interest rates being sustained over a longer period.

Following Thursday’s low of $1,892.70 per ounce, the spot price of gold exhibited a 0.2% increase, reaching $1,892.70. U.S. gold futures also rose by 0.4% to $1,923.20.

With a 0.3% fall in the dollar index and a decrease in the benchmark 10-year U.S. Treasury yields, non-yielding bullion became more affordable for foreign purchasers.

During the preceding week, U.S. 30-year yields reached their highest point in 12 years as investors foresaw the Federal Reserve’s commitment to maintaining higher interest rates due to positive economic indicators.

Despite a slowdown in job growth, the reduction in new claims for unemployment benefits among Americans last week suggested that the labor market continues to be tight.

Market participants are now eagerly anticipating a speech by Fed Chair Jerome Powell on August 25th, during the annual meeting of central bankers in Jackson Hole, Wyoming, where he will discuss the future of the economy.

Although core consumer inflation in Japan decreased in July, it has still managed to surpass the Bank of Japan’s (BOJ) price goal for the sixteenth consecutive month.

China Evergrande, known as the most indebted real estate developer globally and a significant figure in China’s housing crisis, filed for protection from creditors in a U.S. bankruptcy court on Thursday.

The largest gold-backed exchange-traded fund globally, SPDR Gold Trust, reported a decline of 0.8% in holdings to 887.50 tonnes on Thursday, marking the lowest level since January 2020.

Platinum observed a 1% increase, reaching $898.40, while spot silver saw a 0.8% rise, reaching $22.86 per ounce. Palladium also experienced growth, rising by 1.1% to $1,230.72.

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