Gold price fell from two-month highs on Thursdaydue to a rebound in the dollar and bond yields, but the decline was limited by expectations of a pause in interest rate hikes from the Federal Reserve after its meeting next week.
Spot gold fell 0.4% to $1,969.53 an ounce, after hitting its highest since May 17 earlier in the session. Gold futures in the United States closed with a loss of 0.5%, at u$s1,970.90.
“Yields and the dollar have actually bounced a bit, so we’re seeing a bit of a reverse effect in gold. Also, this $2,000 area will be a challenge for the gold market in the short term,” said David Meger, director of metals trading at High Ridge Futures.
The dollar was up 0.6% against rivals after US jobless claims data, making gold more expensive for non-currency buyers.. US 10-year Treasury yields also rose.
The data showed that the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, hitting the lowest level in two months amid ongoing labor market stress.
Investors’ focus now shifts to the US central bank’s policy meeting next week, with markets pricing in a 25 basis point rate hike from the Fed.
Most economists polled by Reuters expect a hike at the July meeting to be the last of the Fed’s current tightening cycle.
Gold is very sensitive to rising US interest rates, as they increase the opportunity cost of holding non-yielding bullion.
In other precious metals, spot silver fell 1.5% to $24.80, after hitting its highest since mid-May; platinum lost 1.8% to $955.51; and palladium sank 2.3% to $1,278.02.
Source: Ambito
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