Gold moved into negative territory on Tuesday as well, despite the support given by weaker-than-expected data on business activity in the US, which gave new hope for the case of a rate cut by the FED.
U.S. business activity expanded in April at the slowest pace this year as weaker demand led to the first decline in employment since 2020. April’s S&P Global composite output index of manufacturers and service providers showed the first contraction here and six months.
Bond yields and the dollar fell after the data was released, pushing gold briefly higher before eventually giving up its gains. Earlier on Tuesday, gold fell as much as 1.5% below $2,300 amid easing risks of an Israel-Iran conflict in the Middle East.
The market has turned its attention to US economic data due this week, including the Fed’s preferred measure of inflation, that of personal consumption expenditures, which may give more clues about the path of monetary policy.
Gold for June delivery, the most active futures contract, fell $4.30, or 0.2%, on Tuesday to settle at $2,342.10 an ounce, its lowest close since April 4. On Monday, the stock market was down 2.8%, to settle at $2,346.40 on Monday.
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