. Gold Rises Above $1,960 Amid Volatile Trading - 07 June 2023

Gold Rises Above $1,960 Amid Volatile Trading

Gold Rises Above $1,960 Amid Volatile Trading

07 Jun 2023

 As volatile trading continues, gold climbs again above $1,960.

On Wednesday, the gold price barely changed as the markets braced themselves for a Federal Reserve meeting, while copper prices continued their recovery from six-month lows.

The dollar suffered this week due to disappointing U.S. economic statistics, which led to speculation that the Fed wouldn’t have enough room to continue rising interest rates. This led to some support for the yellow metal.

However, this support was only temporary as the dollar recovered amid apprehension about the Fed’s upcoming move. Even though the U.S. economy appeared to be slowing down in certain areas, the labor market and inflation remained hot, increasing pressure on the central bank to tighten policy.

Even if the Fed stops raising interest rates now, it is anticipated to do so for a longer period of time, which is bad news for non-yielding assets like gold.

Over the past month, the demand for safe-haven assets has been rather muted, even while the appetite for risk assets has been weakened by a run of disappointing data announcements. However, a recession in the United States and Europe this year might eventually boost gold demand.

After falling below $1,955 early in the morning in Europe, the price of gold found its footing again and increased above $1,960. The benchmark 10-year US Treasury bond yield continues to remain positive, hovering around 3.7%, while XAU/USD struggles to gain bullish momentum.

In the European session, the price of gold (XAU/USD) has demonstrated a strong decline to close to $1,960.00. The priceless metal is making an effort to emerge from the forest. A little decline in the price of gold has been sparked by the US Dollar Index’s (DXY) recovery extension.

The S&P500 futures have carried small gains from the Asian session over to the London session. The Federal Reserve (Fed) is expected to carefully evaluate a neutral interest rate policy position for June’s monetary policy, which has investors in a good mood.

The United States Services PMI, as reported by the ISM agency, barely avoided contraction, raising hopes of a brief pause in the Fed’s policy-tightening campaign. The economic data was just beyond the threshold of 50.0. The United States economy is being forcefully pushed towards a recession by a weak service sector and shrinking factory activity.