On Thursday, gold recovered some ground as traders took advantage of a temporary decline below the crucial psychological $1,900 mark, which was prompted by a barrage of positive U.S. economic indicators.
By 1:52 p.m. EDT (1752 GMT), spot gold was up 0.1% at $1,908.4 per ounce. U.S. gold futures ended the day at $1,917.90, down 0.2%.
Following the release of the report, prices dropped below $1,900 for the first time since mid-March as the dollar index strengthened by 0.4%, making bullion less appealing to foreign investors. 10-year Treasury benchmark yields increased. [USD/] [US/]
The price drop from $2,000 to $1,900 may encourage some bargain shopping, according to David Meger, director of metals trading at High Ridge Futures.
U.S. unemployment claims decreased last week by the highest in 20 months, indicating a strong labor market that supported the first quarter’s GDP.
The hawkish central banks haven’t helped at all, according to Phillip Streible, chief market analyst at Blue Line Futures in Chicago. “It was a one-two punch taking gold another leg lower,” he said.
With U.S. inflation far over the 2% target and a still-tight job market, Federal Reserve Chair Jerome Powell said the majority of the central bank’s members anticipate they will need to hike interest rates at least twice more by year’s end.
Despite the fact that gold is seen as an inflation hedge, increasing rates reduce the attraction of non-yielding metal, and according to current rate projections, it will conclude the quarter in the red for the first time since September 2022.
On Friday, traders anticipated the personal consumption expenditure data for May, which is the Fed’s preferred inflation indicator.
Platinum lost 1.6% to $896.55, an eight-month low, while silver slid 0.6% to $22.59 per ounce.
To $1,228.50, palladium fell 1.6%, approaching its lowest level since December 2018.
