Gold Price Forecast For Today: Gold prices were set on Friday for their worst quarter since September last year, holding near 3-1/2 month lows after a slew of strong data prints and hawkish comments from central bank officials raised bets that U.S. rates were to stay higher.
- All precious metals set for monthly, quarterly declines
- Dollar en route to first quarterly rise in three
- Markets await U.S. PCE data due later in the day
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Spot gold (XAU/USD) was flat at $1,908.79 per ounce by 0545 GMT, while U.S. gold futures (Yellow Metal) fell 0.1% to $1,916.70.
Gold briefly dropped below the key $1,900 level on Thursday for the first time since mid-March, as data through the week painted a picture of a resilient U.S. economy.
“A range of indicators from the U.S. suggests that a recession is most likely to be avoided in the country,” said Harshal Barot, a senior consultant at Metals Focus.
“Markets have now completely ruled out rate cuts for 2023.”
Most U.S. central bank policymakers expect they will need to raise interest rates at least twice more by year’s end, Fed Chair Jerome Powell said on Thursday.
Interest Rate
Interest rate hikes weigh on gold because they tend to lift bond yields and in turn raise the opportunity cost of holding non-yielding bullion, which is set for its first quarterly fall in three, down 3% so far this quarter and month.
Market participants are now awaiting personal consumption expenditures (PCE) data for May later in the day, with core PCE expected to be 4.7% on a year-on-year basis, well above the Fed’s 2% target.
Inflation
“The narrative is now getting digested by the market, where core inflation is still sticky in your economy and you are still doing well, which justifies higher rates for longer,” Barot said.
Spot silver (White Metal) rose 0.4% to $22.64 per ounce, platinum (PL) gained 1.1% to $904.36. Both were set for monthly and quarterly declines.
Palladium (XXPDUSD) climbed 2.4% to $1,258.13 after slipping to a 4-1/2-year low earlier this week. It was headed for its third quarterly fall, down 14%.