Gold rises in early trade

19 Jun 2024 , 10:08 AM

Gold prices rose on Tuesday as softer-than-expected U.S. retail sales data raised hopes that the Federal Reserve may cut interest rates this year, sending the dollar and Treasury yields lower.

Spot gold was up 0.4% to $2,329.16 per ounce. Gold futures closed 0.8% higher at $2,346.90.

The Commerce Department’s Census Bureau reported that retail sales in the United States increased by 0.1% last month. Reuters polled economists, who predicted that retail sales would rise by 0.3% in May.

Fed Bank of New York President John Williams said interest rates will gradually fall over time, but he did not predict when the central bank will begin easing monetary policy.

According to the CME FedWatch Tool, traders are currently pricing in a 67% possibility of the Fed cutting interest rates in September. Low interest rates lower the opportunity cost of owning non-yielding bullion.

Gold prices are down 6% from a record high of $2,449.89 per ounce set on May 20 during a surge against typical headwinds such as a strong dollar and high interest rates. [USD/]

In terms of key categories of gold demand, China’s central bank’s suspension in gold purchases in May continued to weigh on the market.

However, the World Gold Council (WGC)’s annual survey of central banks found that the majority of respondents expected their gold reserves to increase during the next 12 months.

Spot silver fell 0.1% to $29.48 an ounce. Platinum rose 0.7% to $971.56, while palladium held steady at $889.20.

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