Monday, June 5, 2023

Gold wobbles as inflation triggers US rate hike bets

By Deep Kaushik Vakil

(Reuters) – Gold regained some of its gains on Friday after its third straight weekly loss, the likelihood of a last-minute air deal and longer-term higher interest rates after data on higher-than-expected U.S. inflation.

* At 1540 GMT, spot gold was up 0.1% at 1,941.82 ounces, up 0.9% in the session. U.S. gold futures were down 0.1% at $1,942.10.

* The White House and congressional Republicans are trying to finalize a deal to raise the debt ceiling for two years.

* Bullion hit a two-month low of $1,936.59 in Asian trade, plunging 1.8% on the week, the worst since early February.

* Traders are selling short-term as inflation data shows a possible hike in June, said Tai Wong, a New York-based independent trader. “Despite the positive noise coming from Washington, it will still be difficult to reach the deadline before June 1,” he said.

* The personal consumption expenditures (PCE) price index, which the Federal Reserve seeks to hit its inflation target of 2%, rose 4.4% in the 12 months to April, after advancing 4.2% in March.

* Traders increased their bets, because H did not finish raising the rates, which would reduce the attractiveness of gold, which did not deserve it.

* The 10-year Treasury yield and the dollar index hovered at their highest levels around mid-March, both heading for third straight weekly gains.

* In other metals, spot silver gained 1.6% to $23.13 an ounce, but also posted a third consecutive weekly decline; platinum rose 0.3% to 1,023.93; and palladium improved 0.5% to $1,424.28.

(Reporting by Deep Vakil and Seher Dareen in Bengaluru; Editing in Spanish by Carlos Serrano)

Nation World News Desk
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