Early Asian trade saw a small decrease in gold prices as a result of a stronger currency and worries about anticipated Federal Reserve interest rate increases. U.S. gold futures declined by 0.2% to $1,925.10 while spot gold decreased by 0.1% to $1,917.19 per ounce. Gold became more expensive for owners of other currencies due to the dollar index remaining stable near a two-week high. Rate increases in July and November are anticipated by investors, which may deter gold investment.
Prices for palladium and silver increased somewhat while those for platinum and silver stayed the same.
A slightly stronger U.S. dollar supported a little decline in gold prices early on Monday in Asia, while the possibility of further Federal Reserve interest rate increases decreased demand for bullion.
By 0053 GMT, spot gold had decreased 0.1% to $1,917.19 per ounce, while U.S. gold futures had decreased 0.2% to $1,925.10.
On anticipation of a longer Fed rate hike path in the future, gold closed June 2.2% down and fell 2.5% for the second quarter.
For holders of other currencies, gold is now pricey due to the dollar index remaining stable near the two-week high reached on Friday.
The Federal Reserve’s preferred core PCE price index, which excludes food and energy, rose 4.6% on an annual basis in May after rising 4.7% in April, despite the fact that U.S. consumer expenditure remained flat in May.
investors price in another 25 bps rate hike in November, sending rates into the 5.5%-5.75% area before cuts are expected in 2024. This means that there is an 84% chance that a 25 bps rate hike will occur in July.
On July 5, the minutes of the FOMC meeting held on June 13–14 will be made public.
High interest rates deter investment in gold that doesn’t yield.
Business confidence in Japan increased in the second quarter, while factory activity decreased in June.
The Institute of Supply Management (ISM) will release its nationwide PMI reading in the U.S., but due to a U.S. holiday on July 4, trading volume on Monday may be low.
Spot silver was unchanged at $22.74 per ounce, platinum dropped to $900.19, and palladium increased to $1,232.06, all of which were all minor changes.