Gold prices rise in early trade

8 Jun 2023 , 09:38 AM

Following a 1% decline in the previous session, gold prices increased slightly on Thursday as investors cautiously anticipated the next Federal Reserve policy meeting in the wake of the Bank of Canada raising rates to a 22-year high.

Spot gold was up 0.3% at $1,945.60 per ounce. American gold futures remained stable at $1,960.10.

The Bank of Canada increased its overnight rate on Wednesday to a 22-year high of 4.75%, and markets and economists quickly predicted yet another increase next month to cool down an overheating economy and persistently rising inflation.

According to U.S. Treasury Secretary Janet Yellen, the U.S. economy is strong due to strong consumer spending, but some sectors are slowing down. She said that she anticipates ongoing success in bringing inflation down over the next 2 years.

Prior to the Fed meeting on June 13, the May U.S. consumer inflation report will be released, giving investors more insight into the condition of the largest economy in the world.

Lower interest rates make zero-yield bullion more appealing.

According to analysts surveyed by Reuters, the Fed will not raise interest rates for the first time in more than a year at its meeting on June 13-14.

According to news reports, it would take rate cuts from the Fed for the dollar to drop significantly, contrary to what another Reuters poll indicated about the currency’s recent resurgence.

The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust GLD, reported that its holdings decreased by 0.37% to 934.65 tonnes on Wednesday from 938.11 tonnes on Tuesday.

Spot silver increased by 0.1 percent to $23.4794 per ounce, platinum increased by 0.3 percent to $1,021.84, and palladium increased by 0.5 percent to $1,395.67.

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