Gold Rebounds Slightly, Trend Remains Fragile
Gold prices edged higher on Friday (June 26th), but remained on track for a sharp weekly decline. The main pressure remains from the US dollar, which remains near a 13-month high, and growing expectations that the Federal Reserve could raise interest rates again this year.
Spot gold prices rose 0.55% to US$4,050.88 per troy ounce in the latest trading session. Meanwhile, US gold futures rose 0.4% to US$4,063.77 per troy ounce. Despite the daily rebound, gold still has the potential to decline nearly 3% this week and has already weakened by around 11% for the month.
The US dollar remains the main factor limiting gold's recovery. The greenback remains near its 13-month high and is headed for its second consecutive weekly gain. A strong dollar makes gold more expensive for buyers using other currencies, thus suppressing demand for the precious metal.
Pressure on gold also comes from expectations about Federal Reserve policy. US Personal Consumption Expenditures (PCE) inflation data released Thursday showed that price pressures remain high. PCE rose 4.1% annually in May, the highest reading in more than three years and returned above 4% for the first time since 2023.
While the PCE figure matched market expectations and eased concerns about more aggressive interest rate hikes, inflation remains well above the Fed's 2% target. This situation has led the market to still consider the possibility of a rate hike in September. High interest rates tend to pressure gold because the precious metal offers no yield.
Geopolitical risks in the Middle East helped limit gold's decline. Investors are still monitoring developments after a cargo ship was reportedly attacked near the Strait of Hormuz. The incident briefly revived safe-haven demand, although not strong enough to offset pressure from the US dollar and expectations of high interest rates.
In other precious metals markets, silver rose 0.47% to US$58.17 per ounce, but was still headed for a weekly decline of around 12%. Platinum jumped 4% to around US$1,608.23 per ounce, but remained on track for its seventh consecutive weekly decline.
Meanwhile, copper prices were mixed. The benchmark copper contract on the London Metal Exchange fell 0.4% to US$13,249.33 per ton, while US copper futures rose 0.45% to US$6.10 per pound. These movements indicate that the metals market remains under mixed pressure from interest rate sentiment, the US dollar, and concerns about global growth.
Going forward, gold's direction will depend heavily on the movement of the US dollar, Treasury yields, and market expectations regarding the Fed's policy. If the dollar remains strong and the likelihood of an interest rate hike persists, gold risks further pressure. However, if yields fall further or geopolitical risks increase, gold still has a chance of holding the psychological level of US$4,000. (arl)
Source: Newsmaker.id
