Sat, June 15, 2024

Gold Prices Skyrocket: 2.6% Rise Amid Market Speculations

Gold

Quick Look:

  • Spot gold hit $2,386.55 (up 0.5%) but fell to $2,379.18 (-1.73%) later; the weekly increase was 2.6%.
  • XAU prices neared $2,400 due to potential Fed rate cuts; U.S. Treasury yields fluctuated; the dollar remained low.
  • Gold prices have risen significantly, with the potential for a record high this year despite physical demand dips.

On Friday at 00:59 ET (04:59 GMT), spot gold prices stood at $2,386.55, reflecting a 0.5% increase. Concurrently, gold futures were valued at $2,405.40, a 0.6% rise. However, by 09:29 GMT the same day, XAU/USD prices had declined to $2,379.18, representing a drop of $41.85 or 1.73%. Over the week, spot gold prices exhibited a robust performance, increasing by 2.6%.

Gold Drops 1.73% to $2,379.18 by 09:29 GMT

This Friday saw the release of crucial nonfarm payroll data, a significant indicator of the U.S. labour market’s health. The upcoming Federal Reserve meeting is highly anticipated, with expectations that interest rates will remain unchanged. Market participants will closely scrutinise any signals on future monetary policy during this meeting.

Spot Gold Increases 2.6% Over the Week

Gold prices have been edging towards the $2,400 mark, driven by heightened speculation about potential interest rate cuts by the Federal Reserve. The imminent release of nonfarm payroll data particularly influences this upward trend. A string of weak U.S. economic reports has bolstered expectations of Fed rate cuts in September, leading to the dollar reaching a two-month low.

Interest rate reductions by the Bank of Canada and the European Central Bank have fuelled optimism about looser monetary policies, benefiting the metal markets. On Friday, U.S. Treasury yields rose as investors awaited the labour market data, while on Thursday, the benchmark 10-year U.S. Treasury yield fell to 4.275%, its lowest level since April 1. The dollar remained near an eight-week low, showing minimal movement ahead of the payroll report.

Key Payrolls Data and Fed Meeting Influence Markets

Gold prices have experienced significant growth, currently trading around $2,380 per ounce, up from approximately $1,800 per ounce 18 months ago. Despite a notable decline just before the release of the U.S. Non-Farm Payrolls report, gold prices are moving toward their first weekly gain in three weeks. Increasing bets on the Federal Reserve potentially could cut interest rates soon. Declining bond yields and a weaker dollar further strengthen the support for gold prices. According to consultancy Metals Focus, gold prices could reach another record high this year, even with a dip in physical demand.

Gold Approaches $2,400 Amid Fed Rate Cut Speculation

The nonfarm payrolls report for May should show an increase of 190,000 jobs, up from April’s 175,000. The latest wage growth data should indicate a year-over-year increase of 3.9%. Investors are hoping for signs of a slowing labour market, which could signal the Federal Reserve the need to ease monetary policy and consider cutting interest rates. According to CME Group’s FedWatch tool, traders are pricing in a 68% chance of a rate cut by September. The possibility of Fed rate cuts and ongoing Chinese reserve buying is expected to maintain a broadly bullish trend for gold prices.

68% Chance of Fed Rate Cut by September

The European Central Bank has cut interest rates for the first time since 2019, addressing persistent inflationary pressures. Market hopes are high that a slowing labour market will prompt the Federal Reserve to consider rate cuts. If the labour market data surprises the downside, it could lead to earlier rate cuts by the Federal Reserve. Conversely, a stronger-than-expected jobs report could diminish the chances of a September rate cut, potentially postponing it to November or December.

YOU MAY ALSO LIKE

Stocks

Quick Look: Bilibili Inc. (NASDAQ: BILI) saw an 8.48% rise to $15.61,

Tractable raises $60M to grow in accident - robot recovery

Quick Look: Ray Kurzweil predicts significant lifespan extension and human-AI integration by

Gold

Quick Look: Gold (XAU) reached a record high in May 2024, with

COMMENTS

Leave a Comment

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

User Review
  • Support
    Sending
  • Platform
    Sending
  • Spreads
    Sending
  • Trading Instument
    Sending

BROKER NEWS

Zenfinex Reports Revenue Surge but Faces Operating Losses

London-based broker Zenfinex, now operating as Taurex, has exposed its fiscal year 2023 financial results, which paint a complex picture of its economic situation. Zenfinex’s Fiscal Overview Zenfinex Limited’s revenue hit £848,306, a

BROKER NEWS

Broker News

Zenfinex Reports Revenue Surge but Faces Operating Losses

London-based broker Zenfinex, now operating as Taurex, has exposed its fiscal year 2023 financial results, which paint a complex picture of its economic situation. Zenfinex’s Fiscal Overview Zenfinex Limited’s revenue hit £848,306, a significant