Gold held near three-month lows on Wednesday after strong US economic readings offset bullion’s traditional safe-haven status, while traders positioned for Federal Reserve Chair Jerome Powell’s speech and more data for clues on rate hikes.
Spot gold rose 0.1 percent to $1,915.22 per ounce, hovering close to its lowest level since March 16 at $1,910. US gold futures were flat at $1,924.10.
“Strong economic data (in the US ) strengthened the dollar to send gold back towards its June-low overnight,” said Matt Simpson, senior market analyst at City Index, adding that bullion appeared to be technically driven with bears booking profits.
Data on Tuesday indicating that economy remained on solid footing could lead to more Fed rate hikes to bring down inflation.
Investors expect a 77 percent chance of a rate hike in July, with rate cuts seen from March 2024 onwards, per CME’s Fedwatch tool, with most major US banks expecting a 25-basis-point rate hike.
High interest rates discourage investing in non-yielding gold.
The Fed will publish minutes of its June 13-14 meeting on July 5, while holding its Federal Open Market Committee (FOMC) on interest rates from July 25-26.– Reuters
