Peace Hopes Limit Gold's Decline Today
Gold prices weakened on Friday (June 12th) and are heading for a second consecutive weekly decline. Pressure stems from concerns about persistently high US inflation and growing expectations that the Federal Reserve could raise interest rates again.
Spot gold prices fell 0.6% to US$4,186.99 per ounce and have the potential to weaken more than 3% in a week. Meanwhile, US gold futures for December delivery rose 2.2% to US$4,206.80, supported by renewed hopes for peace in the Middle East.
Previously, gold had touched a six-month low on Thursday. However, prices rebounded after US President Donald Trump said Washington and Tehran could sign a peace deal as soon as this weekend, which could reopen the Strait of Hormuz and ease concerns about global energy supplies.
However, pressure on gold has not completely dissipated. US economic data showed producer prices rose more than expected in May, recording their largest annual increase in three and a half years. This data reinforces concerns that inflation is still persistent and opens the door to the Fed tightening monetary policy again.
Rising interest rates are a negative sentiment for gold because the precious metal offers no yield. The market now prices around a 60% chance of a Fed rate hike in December. In other precious metals markets, silver fell 0.5% to US$67.00 per ounce, while platinum rose 0.6% to US$1,734.08 per ounce. (asd)
Source: Newsmaker.id
