Key points
Gold prices saw a modest rise on Wednesday, gaining 0.1% to $2,331.41 per ounce by 0026 GMT, while U.S. gold futures rose 0.3% to $2,340.50. This increase comes as the U.S. dollar weakened, making gold more affordable for holders of other currencies.
Picture: Gold on the rise, trading at 2329.43 as seen on the VT Markets app.
Federal Reserve Chair Jerome Powell mentioned on Tuesday that the U.S. economy is on a “disinflationary path,” but he emphasised the need for more data to confirm this trend before any decision on cutting interest rates is made.
Lower interest rates typically benefit gold, which does not yield any interest, by reducing the opportunity cost of holding it. Currently, traders estimate a 67% probability of a Fed rate cut in September. This expectation is influencing market sentiment and boosting gold prices.
Recent data shows that U.S. job openings increased in May, following significant declines in the two preceding months. Although the labour market conditions are easing, the trend appears stable.
You might be interested: US dollar slips as inflation data points to rate cuts
The minutes from the Fed’s June policy meeting, expected at 1800 GMT, are highly anticipated for further clues on the economic outlook. Additionally, jobs data, including ADP employment figures, weekly jobless claims, and non-farm payrolls, are due later in the week and will provide more context for the Fed’s decisions.
In the broader precious metals market, spot silver rose by 0.2% to $29.56 per ounce, platinum added 0.6% to reach $996.64, while palladium decreased by 0.8% to $978.80. South Africa’s Impala Platinum reported a strike at its recently acquired Bafokeng operations in Rustenburg, primarily involving contractors demanding permanent positions. This development could impact platinum supply and prices in the short term.
Some employees at Impala Bafokeng have embarked on an unprotected strike at the mine’s operation in Rustenburg. It is reported that the cause of the strike is a demand for permanent employment for some employees.https://t.co/twgyaEX6lr
— SABC News (@SABCNews) July 2, 2024
If the Fed minutes suggest a dovish stance, we might see further gains in gold as investors seek safe-haven assets. The increase in silver prices aligns with gold’s upward trend, often seen as a cheaper alternative to gold. The strike at Impala Platinum’s operations could create supply disruptions, potentially leading to price volatility in the short term.
Start trading now — click here to create your live VT Markets 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.