Gold prices fell on Thursday after traders assessed updated interest rate projections from Federal Reserve officials, who expect only one U.S. interest rate cut this year.
FUNDAMENTALS
* Spot gold was down 0.5% at $2,311.50 an ounce, as of 0134 GMT. U.S. gold futures fell 1.2% to $2,327.20.
* The dollar strengthened by 0.1%, making bullion less attractive to holders of other currencies, while the yield on the benchmark US 10-year bond also rose…
* The US Fed kept interest rates unchanged on Wednesday, while policymakers indicated they only planned to cut rates once in 2024.
* Lower interest rates reduce the opportunity cost of holding bullion without yield.
* Fed Chairman Jerome Powell said the inflation outlook offered by the Fed is “a fairly conservative forecast” that may not be borne out by upcoming data and is subject to revision.
* Jerome Powell added that the better-than-expected consumer price index data was welcomed by the authorities.
* The headline consumer price index was flat month-on-month in May, below expectations for a 0.1% gain. Core prices rose 0.2%, also below economists’ projections for a 0.3% increase.
* Gold’s meteoric rally to successive record highs shows every sign of continuing into the second half of 2024 as the fundamental case for bullion remains firmly in place, although $3,000 an ounce looks out of reach scope, traders and industry experts said.
* China’s consumer price inflation held steady in May while producer price declines eased, but the underlying trend suggests Beijing should do more to support weak domestic demand and a uneven economic recovery.
* China is the largest official buyer of gold.
* Spot silver fell 2.6% to $28.94 an ounce, platinum fell 1.6% to $950.50 and palladium lost 1% to $897.25.
DATA/EVENTS (GMT) 1230 US Initial Jobless Clm Weekly 1230 US PPI Machine Manuf’ing May (Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Sherry Jacob-Phillips)
