Mumbai, 13 Jun (Commoditiescontrol): Gold prices fell on Thursday as traders reacted to the Federal Reserve's updated interest rate projections, which indicate only one U.S. rate cut this year. Spot gold declined by 0.5% to $2,311.50 per ounce, while U.S. gold futures dropped 1.2% to $2,327.20.
The dollar's modest gain of 0.1% made gold less attractive for holders of other currencies. Additionally, the benchmark U.S. 10-year bond yield also increased, further pressuring gold prices.
The Federal Reserve held interest rates steady on Wednesday. However, policymakers indicated they anticipate only a single rate cut in 2024. Fed Chair Jerome Powell described the Fed's inflation outlook as "a fairly conservative forecast," which may need adjustment based on future data. Powell welcomed the better-than-expected consumer price index (CPI) data, which showed the headline CPI was flat month-on-month in May, below the anticipated 0.1% gain. Core prices increased by 0.2%, also under the forecasted 0.3% rise.
Despite recent declines, gold has experienced a significant rally, reaching successive record highs. Market experts and traders believe the fundamental case for bullion remains strong, though the $3,000 per ounce milestone remains elusive for now.
In other precious metals, spot silver fell 2.6% to $28.94 per ounce, platinum decreased 1.6% to $950.50, and palladium dropped 1% to $897.25.
In China, the world's largest official sector buyer of gold, consumer inflation remained stable in May, while producer price declines eased. Nevertheless, the underlying economic trend suggests that Beijing might need to implement further measures to stimulate domestic demand and support an uneven economic recovery.
Overall, the precious metals market continues to navigate the impacts of U.S. monetary policy decisions, economic data, and global demand trends.
(By Commoditiescontrol Bureau: 09820130172)
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