On Thursday, gold prices remained close to a Mid-March low due to a stronger dollar and hawkish remarks from Jerome Powell, the chairman of the U.S. Federal Reserve.
By 0340 GMT, spot gold was down 0.2% to $1,903.19 per ounce, not far off the March low set on Wednesday.
Futures for U.S. gold decreased 0.5% to $1,911.70.
Gold became more expensive for owners of other currencies due to the rising dollar index. [USD/]
According to OCBC FX strategist Christopher Wong, Powell’s hawkish comments reinforced interest rates rising for a longer period of time while lowering the appeal of owning gold due to a higher opportunity cost.
Powell predicted that the Fed funds target rate would likely see two additional rate increases, and he predicted that inflation would not reach the 2% target until 2025.
According to CME’s Fedwatch tool, investors currently estimate an 81% chance of a 25-basis point rate hike in July followed by rates remaining unchanged for the rest of the year.
Non-yielding gold investments are discouraged by high interest rates.
The first-quarter GDP estimates for the United States are anticipated later today, along with the personal consumption expenditures (PCE) data for May on Friday. Market investors are currently anticipating these data.
The core PCE, the Fed’s preferred inflation measure, is expected to be 4.7% on a year-over-year basis, significantly above the Fed’s 2% objective, according to analysts.
The idea of increased interest rates kept Asian markets down, while worries about government involvement prevented the Japanese yen and the Chinese yuan from recovering from recent lows.
According to a survey, China’s factory activity probably decreased for a third consecutive month in June, albeit at a somewhat slower rate.
Silver spot prices were stable at $22.71 per ounce, while platinum prices increased by 0.2% to $912.52.
After falling to a 4-1/2-year low in the previous session, the price of palladium increased by 0.6% to $1,256.83 per ounce.