On Wednesday (June 26), international gold prices remained stable as investors awaited important U.S. inflation data to be released this week.
The data could provide more clarity on the timing of the Fed’s first interest rate cut this year.
After yesterday’s heavy fall, spot gold fell further during the day, once falling below $2,310, and is currently hovering around $2,315, waiting for further clues.
Meanwhile, first-quarter U.S. gross domestic product (GDP) estimates will be released on Thursday, and a personal consumption expenditures (PCE) price index report will be released on Friday.
The author believes: U.S. data released on Friday will show that the personal consumption expenditures index inflation rate fell to 2.6% in May from 2.7% in April, the lowest level in more than three years.
There is still a lot of physical demand from central banks, and there is demand in Asia. According to data from the World Gold Council,
Global physically-backed gold ETFs saw inflows of $212 million last week, totaling 2.1 metric tons.
The non-yielding gold hit a record high of $2,449.89 on May 20 and is up 12% this year.
Supported by the Fed’s interest rate cut expectations and central banks’ massive purchases of gold amid geopolitical tensions.
Higher interest rates increase the opportunity cost of holding non-yielding gold, which has seen relatively shallow declines as buyers step in from the sidelines as prices retreat.
The ultimate expectation is that the Federal Reserve will cut interest rates, and investors are very reluctant to short gold.
However, gold needs to break through the $2,368 level to surpass last week’s high.
Author: Zhou Tong (analyst) 26-06-2024
At 20:40 Hong Kong time, spot gold was trading at US$2,314.11 per ounce.
#The above are only the author’s personal opinions and have nothing to do with the company’s position.
Warm reminder from Hongfeng Gold: The strategic suggestions are for reference only. There are risks in entering the market, so investment needs to be cautious.