Gold slips to over one-week low on hawkish Fed, US data

GLOBAL-PRECIOUS/ (UPDATE 9, GRAPHICS):PRECIOUS-Gold slips to over one-week low on hawkish Fed, US data

First Published23 May 2024
Gold slips to over one-week low on hawkish Fed, US data
Gold slips to over one-week low on hawkish Fed, US data


Fed officials hold faith in disinflation despite doubts


Fed minutes reflect discussion of possible further hikes


India may reduce gold imports by nearly a fifth in 2024


Silver holds above crucial level of $30 per ounce


Platinum is up 11% so far this month

By Harshit Verma

May 23 - Gold fell to more than a week's low on Thursday, extending its decline for a third straight session, as investors grew apprehensive over U.S. rate cut timings and on strength in U.S. business activity.

Spot gold fell 1.8% to $2,336.39 per ounce, its lowest since May 13, as of 1748 GMT. U.S. gold futures settled 2.3% lower to $2,337.20 per ounce.

The non-yielding bullion hit a record high of $2,449.89 on Monday and is up 14% so far this year.

Making gold less attractive, the dollar cut its losses for the day on U.S. business activity accelerating to the highest level in over two years in May, suggesting that economic growth picked up halfway through the second quarter.

Advancing dollar and a weakening U.S. rate cut outlook have catalyzed a round of profit-taking in gold, but the downside will be limited, said Daniel Ghali, commodity strategist at TD Securities.

While the policy response for now would "involve maintaining" interest rates at current levels, the latest Fed minutes reflected discussions of possible hikes.

"Investors that care about the Fed outlook actually aren't all that long in gold. They've missed the rally and in turn, don't have that much gold to sell. So while we do think the gold prices are staging a correction here, but that will be relatively shallow," Ghali said.

UBS raised its gold price forecasts to $2,600/oz for 2024-end and recommended to buy on dips at around $2,300/oz or below, citing a series of softer U.S. data for April, an upwardly revised central bank demand for gold and ongoing geopolitical uncertainties.

Meanwhile, imports to India, the world's second-biggest gold consumer, could fall by nearly a fifth in 2024 as high prices spur retail consumers to exchange old jewellery for new items, according to an industry body.

Spot silver fell 1.8% to $30.22. The recent rally in gold and copper prices drove it to $32.5, an 11-year high, earlier this week.

Platinum was down 1.4% at $1,020.35, while palladium lost 3.5% to $964.75.

This article was generated from an automated news agency feed without modifications to text.

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HomeNewsworldGold slips to over one-week low on hawkish Fed, US data

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