Both gold and silver futures fell to nine-week lows on Thursday (25th), closing in black for the fourth consecutive trading day. The credit rating agency Fitch put the top US AAA credit rating on the negative watch list, helping The strengthening of the dollar is the main reason.
- New York gold futures for June delivery fell $20.90, or 1.1%, to $1,943.70 an ounce, the lowest close since March 21.
Fitch said it was considering downgrading the U.S. debt rating. The news boosted the dollar and weighed on gold.
Analysts at Sevens Report Research said: “Debt-limit negotiation drama is getting most of the attention, but a number of Fed officials have recently turned to a hawkish tone, helping the dollar appreciate and spurring policy-sensitive interest rates ( Mainly bonds with maturities X days after default) rose.”
Fed Governor Waller (Christopher Waller) said on Wednesday that he has not yet decided whether to support another rate hike in June, but will not support a pause in rate hikes unless he sees progress in cooling inflation.
Still, several officials said further policy tightening may not be needed if the economy develops as they expect, according to the minutes of the May meeting released on Wednesday.
“Gold’s uptrend for the year could be broken if the dollar continues to appreciate and yields extend their recent gains,” analysts at Sevens Report said.
Gold has turned black so far this month, but is still up nearly 5% so far this year.
Gold rose to the second highest price in history in early May, but then continued to pull back as the dollar strengthened. The appreciation of the U.S. dollar means that it is more expensive for overseas buyers to buy gold.
Michael Hewson, chief market analyst at CMC Markets UK, said that the appreciation of the dollar is the main reason why gold may fall further. He predicted that gold futures may fall to $1,900 an ounce.
Debt-ceiling talks between U.S. President Joe Biden and House Speaker Kevin McCarthy appear to be closing in on a deal, including spending cuts and raising the debt limit.
“It’s a second whammy for gold … a deal this weekend would take the biggest risk off the table,” said Edward Moya, senior market analyst at OANDA.
U.S. jobless claims rose only moderately early last week on Thursday, suggesting the labor market remains strong, and gross domestic product was revised upwards in the first quarter, factors that extended gold’s decline.
“We’ve seen another round of impressive economic data that suggests the U.S. economy remains resilient … and adds weight to the case for another rate hike,” Moya said.
Traders are awaiting Friday’s release of the core personal consumption expenditures (PCE) price index, the Fed’s preferred inflation data.
According to the CME FedWatch tool, according to the latest market bets, the probability of the Fed raising interest rates by 1 yard (25 basis points) in June is now 50%, and it will not cut interest rates until September.
Comex Metals Commodities Trading
- Silver futures for July delivery fell 33 cents, or 1.4%, to $22.91 an ounce, the lowest close since March 22.
- Copper futures for July delivery rose 3 cents, or 0.7%, to $3.59 a pound.
- Platinum futures for July delivery fell 0.3% to $1,026.30 an ounce.
- Palladium futures for June delivery rose 1.3% to settle at $1,415.60 an ounce.
Tags: Precious Metals Hours United States watch list downgrading Fitch gold silver fell nineweek lows Anue tycoon
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