Back

Gold rises 1% to two-week peak as Fed rate-cut bets lift demand

By Brijesh Patel

(Reuters) -Gold prices rose more than 1% on Thursday to their highest level in two weeks, as recent U.S. economic data showing signs of a slowdown in the world’s largest economy boosted bets for interest rate cuts from the Federal Reserve this year.

Spot gold was up 1.4% at $2,358.79 per ounce as of 02:06 p.m. ET (1806 GMT), its highest since June 7. U.S. gold futures settled 0.9% higher at $2,369.

“The market is starting to increasingly expect the U.S. central bank to start its easing program. I suspect we might be getting some long positions getting installed into the market,” said Bart Melek, head of commodity strategies at TD Securities.

U.S. jobless claims fell in the latest week, data showed, suggesting a generally stable labor market. U.S. single-family homebuilding in May fell 5.2% to a seasonally adjusted annual rate of 982,000 units.

Last week’s data showed a moderation in the labour market and price pressures, followed up with soft retail sales data on Tuesday, suggesting that economic activity remained lacklustre in the second quarter.

“The precious metals bulls are more confident late this week, following the weaker U.S. retail sales report earlier this week,” said Jim Wyckoff, senior market analyst at Kitco Metals, in a note.

Traders are currently pricing in about a 64% chance of a Fed rate cut in September, according to CME FedWatch Tool. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Safe-haven demand, driven by geopolitical and economic uncertainty, as well as persistent central bank buying contributed to a rally in gold from March to May, taking spot prices to a record high of $2,449.89 on May 20.

Among other precious metals, spot silver rose 3.4% to $30.77 per ounce, platinum was steady at $980.69 and palladium gained 2.7% to $928.84.

(Reporting by Brijesh Patel in Bengaluru; Editing by Shailesh Kuber and Alan Barona)


Source link

Wealthfargo
Wealthfargo

Leave a Reply

Your email address will not be published. Required fields are marked *

We use cookies to give you the best experience. Cookie Policy