Back

PRECIOUS-Gold holds ground on softer dollar, rate-hike pause bets



2023-06-06T09:00:11.000000Z










font

Shafaq News/ Gold prices steadied in a tight range on Tuesday as optimism that the U.S. central bank will not hike interest rates this month kept the dollar under pressure.

Spot gold XAU= held its ground at $1,960.89 per ounce by 0239 GMT. U.S. gold futures GCcv1 edged 0.1% higher to $1,976.80.

The dollar index .DXY eased 0.1%, making gold a more favourable bet among overseas investors. The yield on 10-year Treasuries US10YT=RR also retreated after weaker U.S. services sector data on Monday. USD/US/

“(However,) the Fed’s data-dependent stance will mean that rate expectations may continue to see huge swings due to its higher sensitivity to incoming economic data, with a key look-ahead being the U.S. May CPI report next week,” said Yeap Jun Rong, a market analyst at IG.

A survey from the Institute for Supply Management showed the U.S. services sector barely grew in May as new orders slowed, pushing a measure of prices paid by businesses for inputs to a three-year low, which could aid the Fed’s fight against inflation.

Lower interest rates tend to lift gold as it reduces the opportunity cost of holding the non-yielding asset.

“(But) the constantly-shifting narrative around how high the terminal rate will have to be and the timeline for rate cuts could challenge gold prices’ upside for now, until greater clarity is being presented on that front,” Jun Rong said.

Traders have priced in an 76% chance that the Fed will hold interest rates at its June 13-14 policy meeting, according to CME Group’s FedWatch tool.

Indicative of sentiment, SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.15% to 939.56 tonnes on Monday from 938.11 tonnes on Friday.

Spot silver XAG= fell 0.1% to $23.5632 per ounce, platinum XPT= steadied at $1,030.64, and palladium XPD= rose 0.3% to $1,418.24.

(REUTERS)


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Your email address will not be published.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