Last Update: June 06, 2023, 02:49 AM IST
New York, United States (USA)
FILE PHOTO: A saleswoman shows gold bangles to a customer at a jewelery showroom on the occasion of Akshaya Tritiya, a major gold shopping festival, in Kolkata, India May 3, 2022. (Image: Reuters)
Spot gold was up 0.6% at $1,958.89 an ounce by 1:40 p.m. EDT (1740 GMT), erasing earlier session losses
Gold rose on Monday after the Federal Reserve reined in bets it would hold interest rates steady next week following weak US services sector growth.
Spot gold rose 0.6% to $1,958.89 an ounce by 1:40 p.m. EDT (1740 GMT), erasing losses from earlier in the session, when it hit its lowest level since May 30.
US gold futures rose 0.2% to $1,974.30.
The US services sector barely grew in May as new orders slowed, with the Institute for Supply Management’s non-manufacturing index falling from 51.9 in April to 50.3 last month and not expected to rise to 52.2.
“The market is really taking this as a reason to hike some rates here … it’s certainly something the Fed will be pleased to see with respect to its fight against inflation,” said Daniel Ghali, commodities strategist at TD Securities. Is.”
The index is viewed by some economists as an indicator of the Fed’s preferred inflation gauge, as services prices tend to be stable and less reactive to rate hikes.
The dollar index slipped after the data, making dollar-denominated bullion more affordable for overseas buyers, while 10-year Treasury yields retreated. [USD/] [US/]
Traders expect the Fed to hold interest rate hikes at 78% at the June 13-14 meeting, according to the CME Fedwatch tool.
In a high-interest rate environment, non-interest bearing bullion becomes less attractive to investors.
However, Heraeus Precious Metals said in a note, “Gold may look more expensive despite recent declines due to sticky inflation and the likelihood of the Fed not cutting interest rates meaningfully in 2023.”
Gold fell more than 1% on Friday after data showed the US economy added 339,000 jobs last month, above estimates of 190,000.
Silver fell 0.2% to $23.54, platinum gained 2.6% to $1,029.92, while palladium fell 0.4% to $1,414.21.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – reuters,
