Gold “significantly” ahead of US inflation data

Gold prices steadied on Wednesday as, after tensions in the Middle East appeared to calm down, investors turned their attention back to economic data and in particular to US inflation data due on Friday and possibly providing a insight into the path the Federal Reserve will take on the interest rate front.

Spot gold, which hit its lowest level since April 5 yesterday, held steady around $2,322.60 an ounce on Wednesday, while the U.S. contract for the precious metal closed 0.3% lower at $2,336.10 an ounce. .

Notably, gold prices have fallen more than $100 from an all-time high of $2,431.29 hit on April 12, amid escalating tensions between Israel and Iran against the backdrop of Tel Aviv’s continued shelling of Gaza. which had sparked fears of a generalization of the crisis in the Middle East.

In other metals, spot silver was down 0.2% at $27.22 an ounce, while platinum was down 0.6% at $902.62 an ounce and palladium slipped 1.5% lower to $1,003.88 an ounce.

As Jim Wyckoff, senior analyst at Kitco Metals notes, “we are seeing a correction in the gold and silver markets due to the de-escalation of tensions in the Middle East,” which raises, he adds, “the question of whether these corrections will turn into near-term bearishness.” trend that would mean that the markets are at their highs”.

Investors, he notes, are looking for answers to this question in financial data. “The market’s focus has refocused on economic data and the Fed. If a ‘hot’ inflation reading comes in, then it will be harder for the Fed to cut rates and gold could slip below 2,000 dollars”, and this is because, as is known, high interest rates reduce the attractiveness of the metal, which does not offer a return.

In particular, investors are looking ahead to US GDP data due tomorrow and especially Friday’s personal consumption expenditure data, the Fed’s preferred gauge of inflation, which they hope will give a clearer picture. on the next moves of the US Federal Reserve.

It is noted that investors, after the latest positions of Fed officials, expect that the American central bank will proceed with its first rate cut in September, instead of June, which they expected until relatively recently.

Source: capital.gr

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