Gold holds steady after biggest sell-off in 3-1/2 years
Mon June 10 2024
Spot gold was up 0.1% at $2,295.29 per ounce, as of 0346 GMT. US gold futures fell 0.5% to $2,312.20. Bullion declined 3.5% on Friday in its biggest drop since November 2020 after the US jobs report and China data showing the world’s top consumer held off gold purchases in May after 18 consecutive months of buying.
“The medium-term bullish trend that was in picture since last week or so has now a chance of being damaged from a technical perspective,” said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA.
The jobs report led traders to once again shift their expectations of when the Fed will cut rates and by how much. The chances of a rate cut in September are now at roughly 50%, down from around 70% late on Thursday.
The Fed is not expected to make any change at its policy meeting, but the focus will be on the comments from Fed Chair Jerome Powell and changes to economic projections from the policymakers. US inflation data is also due on Wednesday.
“Unless the dot plot pricing starts to be very less dovish, that means the Fed does not expect any cut being pencilled in this year at all, you could drastically see a tremendous sell-off in gold because that could push US 10-year Treasury yields higher,” Wong said.
The dollar hit a more than one-week high against its rivals, while the benchmark US 10-year Treasury yields scaled its highest since June 3. Spot silver rose 0.9% to $29.43 per ounce, platinum was up 0.8% at $971.10 and palladium gained 1.1% to $922.38.
Source: http://in.reuters.com