Gold prices did not see any noticeable movements during these moments of trading today, Thursday, after ending yesterday’s trading at record levels amid investors’ looking forward to more US economic data to get clues about the path of monetary policy.
The Federal Reserve has indicated its willingness to cut interest rates, and there are concerns about the geopolitical risks that still exist in the markets surrounding the ongoing wars, whether in Ukraine or in the Middle East, which is supporting gold.
Gold reached a record high last week after the Federal Reserve projected three rate cuts in 2024 despite recent high inflation readings.
Investors are now looking to the US Personal Consumption Expenditures (PCE) Price Index report due on Friday to gauge when the Fed might start cutting rates.
The PCE price index is expected to rise 0.3% in February, which will keep the annual pace at 2.8%. Investors will also focus on the US weekly initial jobless claims report due later today.
Traders currently expect a 62% chance that the Fed will start cutting rates in June, according to the US interest rate tracking tool available on the Investing Saudi website. As lower interest rates reduce the opportunity cost of holding bullion.
Gold and the Dollar Now
Gold futures are now up 0.07% to $2214 an ounce. Spot gold is down about 0.04% to $2194 an ounce. On the other hand, the dollar index is up 0.15% to 104.225 points.
Other Metals
Silver fell 0.5% in spot trading to $24.55 an ounce. Platinum rose 0.6% to $899.30 and palladium rose 1.9% to $1002.
Oil Retreats on Rising Dollar and Weak US Gasoline Demand
Oil prices fell for a second straight session on Wednesday, weighed down by a rising dollar and government data showing a surprise jump in US crude and gasoline stocks.
Brent crude futures for May delivery fell 16 cents, or 0.2%, to $86.09 a barrel at settlement. The May contract is due to expire on Thursday. The more active June contract fell 22 cents to $85.41. US West Texas Intermediate (WTI) crude futures for May delivery fell 27 cents, or 0.3%, to $81.35 at settlement.
The US Energy Information Administration (EIA) released data on Wednesday showing that crude stocks rose 3.2 million barrels to 448.2 million last week, while gasoline stocks rose 1.3 million barrels, compared with analysts’ expectations. polled by Reuters for an increase of 1.3 million barrels.
Three OPEC+ sources told Reuters ahead of next week’s meeting that the group, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, is unlikely to make any changes to oil production policy before a full ministerial meeting in June. Earlier this month, OPEC+ members agreed to extend production cuts of about 2.2 million barrels per day until the end of June.
Euro Deepens Losses to 5-Week Low on Interest Rate Gap
Euro gives up trading above $1.08 amid bearish expectations
The euro fell in the European market on Thursday against a basket of global currencies, deepening its losses for the third consecutive day against the US dollar, hitting a five-week low, after giving up trading above the psychological barrier at 1.08 dollars, due to rising concerns about the widening current gap in interest rates between Europe and the United States.
Recent comments by European Central Bank officials strongly support the possibility of cutting European interest rates in June. In contrast, the statements of Federal Reserve Governor Christopher Waller reduced the chances of cutting US interest rates in June.
Interest Rate Gap
The interest rate gap between Europe and the United States is currently at 100 basis points, the lowest since May 2022, and is expected to widen to 125 basis points in June in favor of US interest rates, amid the current possibilities surrounding the future of interest rates for the European Central Bank and the Federal Reserve.
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Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.
