Weakening rate cut sentiment pushes gold toward weekly loss

24 May 2024 , 08:54 AM

Although investors reduced their expectations of a U.S. interest rate cut following the Federal Reserve’s most recent meeting, which suggested that monetary policy easing would be delayed, gold prices increased on Friday but was poised for its first weekly decline in three weeks.

Spot gold was up 0.2% at $2,332.14 an ounce. This week, the price of gold has decreased by 3.4%, following a record high of $2,449.89 on Monday. Gold futures were trading at $2,333.70, down 0.2%.

The minutes of the April 30-May 1 meeting of the U.S. central bank reveal that Fed policymakers expressed a lack of confidence that inflation would reach 2% sooner than expected.

Globally speaking, businesses performed better this month. Activity increased in the US and in several regions of Asia and Europe, providing central banks with flexibility to postpone lowering interest rates.

Although gold is seen as an inflation hedge, owning non-yielding gold has a greater opportunity cost as interest rates rise.

An independent research revealed that the value of Peru’s illicit gold shipments exceeds the combined legal gold sales of many other South American nations.

The U.S. released some data on Thursday that is a classic example of “good news is bad news,” and it appears that this will have an impact on Asian markets by delaying the much-anticipated first rate cut.

Due to reduced pricing for platinum group metals, Johnson Matthey’s full-year revenue and pretax profit fell short of market forecasts.

A source familiar with the situation told Reuters that the Russian metals company Nornickel is planning a cooperative project to build a platinum group metals (PGMs) refinery in Bahrain.

Spot silver increased by 0.5% to $30.25 an ounce, while palladium gained 0.1% to $970.75 and platinum increased by 0.3% to $1,021.75 an ounce.

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