The uncertainty created by the US election campaign in recent weeks has provided some support to gold investors looking for a safe haven. However, later in the day, the price lacked this support and closed down 0.1%. On the second trading day of the week, the spot price of gold fell 0.2% to $2,391 per ounce. Similarly, according to dollar/TL calculations, gram gold fell to 2,532 TL.
FED Monetary Policy and Gold Prices
Gold prices have been hitting record levels in recent weeks on the back of the possibility that the Federal Reserve will cut borrowing costs. But investors expect the Personal Consumption Expenditures Price Index (PCE), due for release on Friday, to fall to 2.5% in May from an annual rate of 2.6%. U.S. officials are said to want more inflation data before considering cutting interest rates. This could have a big impact on future gold price volatility.
Meanwhile, imports from China fell by almost two-thirds last month. The drop signals a decline in Chinese demand for gold and highlights weakness in Asian economies that have been a major driver of the metal’s recovery this year. A drop in Chinese demand could bring uncertainty to the global gold market.
The economic data released this week will be one of the main factors that will determine the direction of the gold market. The Fed’s monetary policy and economic signals from China will play a decisive role in shaping the price movement of the precious metal. Investors will be closely watching these changes in the gold market and deciding their strategies accordingly.
