Gold slips in early trade

4 Jul 2023 , 09:36 AM

Tuesday’s early Asian trading saw a modest decline in gold prices as investors anticipated the U.S. Federal Reserve’s meeting minutes from June to learn more about the timing of future interest rate increases.

Spot gold was down 0.1% to $1,919.95 per ounce, while U.S. gold futures were also down, falling to $1,927.80.

The dollar index remained unchanged. A US holiday may result in low trading volume.

The manufacturing PMI from ISM fell to 46.0 last month, the lowest reading since May 2020, from 46.9 in May, reflecting a further decline in U.S. manufacturing.

Despite this, price pressures at the factory gate have continued to decline as supply chain bottlenecks have significantly eased and demand has been tempered by increased borrowing rates.

According to CME’s Fedwatch tool, investors predict an 87% chance of a July rate hike of 25 basis points, which would push rates into the 5.25%–5.50% area before cuts were expected after March in 2024.

On Wednesday, the minutes of the June 13–14 FOMC meeting will be made public.

In response to the yen hitting a close to eight-month low versus the dollar last week, Japan’s top financial diplomat Masato Kanda said on Tuesday that officials were in frequent contact with Janet Yellen of the U.S. Treasury Department and other international authorities.

Spot silver prices decreased by 0.1% to $22.86 an ounce, while platinum prices increased by 0.6% to $911.52 and 1.4% to $1,245.95.

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