Gold scored its fifth rise in six days and was one step away from drilling the u$s2,000

Gold scored its fifth rise in six days and was one step away from drilling the u$s2,000

Gold hit a more than a week high on Thursday, while the dollar fell on weak US economic data and expectations that the Federal Reserve will not raise interest rates in June.

Spot gold rose 0.7% to $1,976.81 an ounce, after climbing 1.1% and hitting its highest since May 24. Gold futures in the United States advanced 0.7% to $1,995.50.

The US manufacturing sector contracted for the seventh straight month in May, while the number of new jobless claims rose slightly last week.

The dollar fell, making bullion cheaper for holders of other currencieswhile the yield on the 10-year Treasury hit a two-week low.

“The Federal Reserve wouldn’t want to go through all this effort and then bring rates back down from where they are. I think they want to keep rates high,” said Daniel Pavilonis of RJO Futures.

Philadelphia Fed chief Patrick Harker said barring surprise economic data, he preferred to hold rates steady in June. Other monetary authorities also pointed to a pause in rate hikes. Markets now see a 75% chance of no change in June.

Gold, which does not earn interest, tends to lose its appeal when rates rise.

In other precious metals, spot silver improved 1.7% to a two-week high of $23.88 an ounce; palladium gained 2% to $1,389.78; and platinum rose 1.2% to $1,004.93 after hitting a seven-week low.

Future outlook for gold

At the macroeconomic level, the job vacancies in the United States rose unexpectedly in April and the previous month’s data was revised upwards, pointing to continued strength in the labor market that could force the fed to raise interest rates again in June.

However, Federal Reserve officials, including the designated vice president, took aim at a “pause” in rate hikes in Juneprompting a quick turnaround in market expectations for another hike, as the US central bank remains cautious in the face of still-strong inflation data.

The index of the dollar, Compared to the greenback after a basket of six major currencies, it rose 0.13% to 104.28 units from its highest level in more than two months, making bullion cheaper for foreign buyers.

Higher interest rates make zero yield bullion less attractive.

Source: Ambito

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