Global gold prices witnessed a decrease with the beginning of the week’s trading, but so far it is stable above the level of $1900 an ounce. This comes in light of the continued negative pressure on gold due to expectations of raising interest rates by the Federal Reserve, but gold has shown flexibility so far and maintained its trading above $1900. Especially that breaking the level opens the way for more declines.
Spot gold prices are trading on Monday, at the time of writing Gold Billion’s technical report, at the level of $1912 an ounce, down by 0.3%, after falling during the past week and hitting a 3-month low at $1892 an ounce.
Gold ended the trading of the first half of 2023, down by 5%, after it recorded a decline during both May and June, down from the historical high it recorded at $2080 an ounce.
During the second quarter of the year, gold lost more than $50 and recorded a decline of 2.5%, after the precious metal was affected by the continued monetary tightening policy by the Federal Reserve and the continuation of rate hikes.
Last week witnessed important data on the US economy, which showed a decline in the core personal consumption expenditures index, which is the Fed’s preferred measure of inflation, to 4.6% from 4.7% in May, but it remains above the bank’s inflation target of 2%.
On the other hand, the US economy continued to grow during the first quarter of the year and recorded 2% better than expected. This data contributed to showing the flexibility of the US economy to withstand further monetary tightening and interest rate hikes by the Federal Reserve, which helped increase expectations of an interest rate hike at the meeting. next July.
Last week, US growth data contributed to pushing gold prices to a 3-month low of $1,892 an ounce, before returning to recovery and stability above $1,900 an ounce, due to inflation data, which witnessed a decline indicating inflation’s response to the Fed’s moves.
So far, the markets have priced in an 87% probability that the Fed will raise rates at its next meeting by 25 basis points, while there is another 70% chance that the Fed will stop again at its September meeting.
And the markets have priced so far only one increase in interest rates during the second half of 2023, which is the main reason behind the stability of gold so far above the level of $ 1900 an ounce, and not seeing gold recording sharp declines so far, especially after the direct statements of Federal Reserve Chairman Jerome Powell that the bank will raise interest. twice this year.
Source / Follow-up