6th May 2024 – In the early trading hours on Monday in Asia, gold prices saw a decrease of 0.3%, with spot gold dropping to $2,294.97 per ounce as of 0040 GMT. Similarly, U.S. gold futures also experienced a dip of 0.3%, settling at $2,301.00 per ounce.
This decline coincided with a slight firming of the dollar index by 0.1%, which typically makes gold, a dollar-denominated asset, less attractive to investors holding other currencies.
Recent U.S. labour market data indicated a slowdown in job growth for April, more than was anticipated. This development has reinforced market expectations that the Federal Reserve might initiate interest rate cuts later in the year, with current projections showing a 67% likelihood of a cut in September.
High interest rates have been increasing the opportunity cost of holding non-yielding assets like gold, impacting investor interest.
Comments from Federal Reserve officials are keenly awaited by traders for further clues on the interest rate trajectory. Austan Goolsbee, president of the Chicago Fed, recently suggested that the Fed could enhance its quarterly “dot plot,” which outlines policymakers’ interest-rate-path views, by including individual economic expectations.
Meanwhile, John Williams, president of the New York Fed, emphasised the importance of maintaining the 2% inflation target to achieve price stability. These insights are crucial as they provide a glimpse into the strategic considerations of the Fed’s policy decisions.
New York Fed President John Williams Stresses 2 pc Inflation Target for Economic Stabilityhttps://t.co/tyRJDj1x5C
— TIMES NOW (@TimesNow) May 4, 2024
In the international market, physical gold demand in India remained subdued last week. Despite a slight price correction, buyers are holding off purchases in anticipation of a further price drop.
In China, gold premiums also decreased for the second consecutive week, reflecting tepid demand during the holiday period.
The broader precious metals market also mirrored gold’s downtrend. Spot silver decreased by 0.2% to $26.49 per ounce. Platinum saw a decline of nearly 0.7%, pricing at $948.40 per ounce, while palladium edged down by 0.5% to $940.60 per ounce.
As gold prices fluctuate in response to the strengthening U.S. dollar and anticipations surrounding Federal Reserve policies, savvy traders are presented with observable opportunities to capitalise on these movements.
Whether you are looking to hedge against inflation, speculate on economic announcements, or diversify your investment portfolio, understanding the dynamics of precious metals can provide a strategic advantage.
Start trading today. Click here to open a live account.
Education
Company
FAQ
Promotion
Risk Warning: Trading CFDs carries a high level of risk and may not be suitable for all investors. Leverage in CFD trading can magnify gains and losses, potentially exceeding your original capital. It’s crucial to fully understand and acknowledge the associated risks before trading CFDs. Consider your financial situation, investment goals, and risk tolerance before making trading decisions. Past performance is not indicative of future results. Refer to our legal documents for a comprehensive understanding of CFD trading risks.
The information on this website is general and doesn’t account for your individual goals, financial situation, or needs. VT Markets cannot be held liable for the relevance, accuracy, timeliness, or completeness of any website information.
Our services and information on this website are not provided to residents of certain countries, including the United States, Singapore, Russia, and jurisdictions listed on the FATF and global sanctions lists. They are not intended for distribution or use in any location where such distribution or use would contravene local law or regulation.
VT Markets is a brand name with multiple entities authorised and registered in various jurisdictions.
· VT Global Pty Ltd is authorised and regulated by the Australian Securities & lnvestments Commission (ASIC) under licence number 516246.
· VT Global is not an issuer or market maker of derivatives and is only allowed to provide services to wholesale clients.
· VT Markets (Pty) Ltd is an authorised Financial Service Provider (FSP) registered and regulated by the Financial Sector Conduct Authority (FSCA) of South Africa under license number 50865.
· VT Markets Limited is an investment dealer authorised and regulated by the Mauritius Financial Services Commission (FSC) under license number GB23202269.
· VTMarkets Ltd, registered in the Republic of Cyprus with registration number HE436466 and registered address at Archbishop Makarios III, 160, Floor 1, 3026, Limassol, Cyprus.
Copyright © 2024 VT Markets.