Gold Gleams on Rate Cut Hopes

8 Jul 2024 , 10:00 AM

Gold prices fell on Monday but remained close to a more than one-month high set the day before, after softer US data raised the chance of a Federal Reserve interest rate drop in September.

Spot gold fell 0.2% to $2,386.58 per ounce, after reaching its highest level since May 22 on Friday. Gold futures fell 0.2% to $2,393.80.

On Friday, the unemployment rate rose to a 2-1/2-year high of 4.1%, indicating a weakening job market.

According to CME’s Fedwatch Tool, markets expect the US central bank to raise interest rates in September with a 78% possibility. Traders are also factoring in an increasing likelihood of a second rate cute in December.

Lower rates lower the opportunity cost of storing non-yielding bullion.

However, bullion prices were restricted by news that China’s central bank did not add to its gold holdings for the second consecutive month in June.

Last week, physical gold merchants in India provided discounts due to high pricing, as they waited for a possible import tariff cut in the upcoming budget.

Meanwhile, Perth Mint’s gold product sales fell, while silver sales fell to their lowest level since June 2019, the refiner said on Friday.

Spot silver lost 0.2% to $31.15, platinum decreased 0.3% to $1,024.00, while palladium fell 0.8% to $1,017.78.

For feedback and suggestions, write to us at [e-mail]