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Gold prices subdued as US economic data backs Fed’s interest rate stance

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Kavya Gudul

Reuters – Gold fell modestly on Friday after solid U.S. economic data showed the Federal Reserve should keep interest rates high for the long term. But bullion prices were undermined by caution ahead of inflation data and next week’s policy meeting.

At 0944 GMT, spot gold fell 0.2% to $1,926.09 per ounce, but remained in a relatively narrow range after losing nearly 1% in the previous session following US data.

US gold futures fell 0.1% to $1,927.30.

Michael Hewson, chief market analyst at CMC Markets, said the U.S. GDP numbers “should probably have to keep rates higher for longer, even though inflation is starting to look a little more moderate.” It encourages speculation,” he said, putting pressure on Kim.

Thursday’s data showed the U.S. economy grew faster than expected, but most economists said it would be a short and mild one compared to previous recessions due to an unusually strong labor market. However, we do expect a recession by the second half of the year.

Meanwhile, the dollar index remained largely stable, and greenbacked bullion was not very attractive. [USD/]

Investors are eyeing the central bank’s two-day policy meeting next week, which is widely expected to raise rates by 25 basis points.

Gold that pays no interest tends to profit when interest rates are low because it reduces the opportunity cost of holding bullion.

“But this weakening rate hike[by the Fed]has been priced into the gold price for quite some time, so any disappointing move could have a big impact on the price of gold,” said Kinesis Money analyst Rupert Rowling. will give you,” he said. Note.

US Personal Consumption Expenditure (PCE) data due 1330 GMT are also of interest.

Spot silver fell 0.7% to $23.72 an ounce.

Platinum fell 0.9% to $1,009.38 and palladium fell 0.5% to $1,668.69. Both metals were headed down for the third week in a row.

(Reporting by Kavya Guduru of Bangalore; Editing by Shailesh Kuber)

(Only the headlines and photos in this report may have been modified by Business Standard staff. The rest of the content is auto-generated from syndicated feeds.)

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