Fed rate indecision pushes gold

Ounce There have been significant fluctuations in gold and silver prices recently due to policy changes by the US Federal Reserve (Fed) in the coming period. Incoming news feeds on inflation and employment indicators are constantly updating the Federal Reserve’s forecasts. While precious metals were suppressed by the intensifying expectation of the Fed’s rate hike in June, the expectation that the Fed would hold interest rates constant limits declines in precious metals and allows them to show new uploads. In this sense, all important data will arrive until June 14.
As a result, speculation about the Federal Reserve will naturally have an impact on the dollar index, the interest rate on US bonds, and precious metals such as gold and silver. Gold fell 1.5 percent to $1,947 after the US Nonfarm Payrolls report on Friday looked surprisingly strong.

FAR FROM THE PEAK

On the other hand, silver fell 1.3 percent to $23.66 an ounce. May started with great excitement as gold approached all-time highs of more than $2,085 an ounce. However, she then spent three weeks in a strong downtrend. Prices fell to a two-month low on May 31, and the week ended at $1,947. The expectations for the Fed market are slowly faltering. Even if the Fed doesn’t change rates in June, there is growing recognition that there may be another rate hike this summer. This change in interest rate expectations creates a challenging environment for gold as it supports the dollar, which is trading at a three-month high.

Central banks are bullish on gold

■ World According to the Gold Council’s 2023 Central Bank Gold Reserves Survey, central banks will continue to view gold positively. According to the survey, 24 percent of central banks plan to increase their gold reserves in the next 12 months. The survey also showed that central banks are more pessimistic than previous surveys about the future role of the US dollar. However, 62% of participants expect gold’s share of total reserves to increase. Last year, the rate of those who forecast an increase was 46 percent.

It should be on the road in July.

■ poweredComments from the authorities ahead of the June 14 interest rate meeting are getting harsher. Finally, former US Treasury Secretary Lawrence Summers said that if the Fed does not raise interest rates this month, it should continue with a 50 basis point hike in July. Harvard University Professor Summers told Bloomberg that the Fed should be careful about the risk of overheating the economy.