June 12, 2023: Gold Rises, Digital Currencies Decline, and Oil Drops

Gold Rises as Dollar Weakens Before US Fed Rate Decision.

Gold prices rose on Monday, June 12, as the dollar weakened while investors await US inflation data and the Federal Reserve’s decision on interest rates.

Spot gold increased by 0.2% to $1,964.80 per ounce, while US gold futures rose by 0.1% to $1,979.5.

The markets were closed in Australia on Monday due to a public holiday.

The dollar index dropped by 0.24% to 103.31, making gold more attractive to foreign buyers.

Investors are now awaiting data on US consumer price index and producer price index, which will be released on Tuesday and Wednesday, respectively, as they will impact interest rate expectations. The non-yielding metal becomes more appealing as interest rates decline.

As for other precious metals, silver fell by 0.47% to $24.295 per ounce in spot trading, while platinum lost 0.09% to $1,011.09.

Palladium climbed by 1.28% to $1,321.50 after hitting its lowest level since May 2019 on Friday.

Digital currencies decline, and Bitcoin trades below $26,000.

Digital currencies decreased during Monday’s trading session after experiencing a sharp drop last week due to accusations against Coinbase and Binance by the US Securities and Exchange Commission (SEC).

According to Coinbase data, Bitcoin dropped by 0.48% to $25,916.14 at 08:30 GMT.
Ethereum declined by 0.9% to $1,747.37, while Ripple dropped by 1.43% to $0.5159.

Gary Gensler, the chairman of the SEC, stated, “We don’t need more digital currencies,” and emphasized that digital currency platforms and brokers must comply with US regulations.

Oil drops ahead of the US Federal Reserve meeting.

Oil prices fell on Monday, June 12, ahead of a meeting of the Federal Reserve Board as investors try to gauge the inclination of the US Federal Reserve regarding interest rate hikes.

Concerns about fuel demand in China and increased Russian crude supplies have impacted the market.

Brent crude futures declined by 29 cents or 0.4% to $74.50 per barrel. US crude dropped by 24 cents or 0.3% to $69.93 per barrel. Both crude benchmarks recorded their second consecutive weekly decline last week after disappointing Chinese economic data raised concerns about demand growth in the world’s largest crude importer.

This effect overshadowed the price recovery caused by Saudi Arabia’s decision to cut production by one million barrels daily in July.

Most market participants expect the US Federal Reserve to leave interest rates unchanged after the monetary policy meeting on Wednesday.

Rate hikes strengthen the US currency, making dollar-denominated commodities more expensive for holders of other currencies and exerting downward pressure on prices.

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.

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