Gold Prices Rise as Dollar Weakens; Focus Turns to US Federal Reserve Minutes

Gold prices rose slightly on Wednesday as the U.S. dollar weakened. Investors focused on the minutes of the Federal Reserve’s latest policy meeting for insights into the central bank’s plans for interest rate cuts.

FUNDAMENTALS

* Spot gold increased by 0.1% to $2,331.41 an ounce, as of 0026 GMT. U.S. gold futures gained 0.3% to $2,340.50.

* The U.S. dollar declined, making gold more affordable for buyers using other currencies.

* Fed Chairman Jerome Powell stated on Tuesday that the United States was on track to reduce inflation, but policymakers needed further data before considering interest rate cuts. They want to confirm if the recent decrease in inflation readings accurately reflects the state of the economy.

* Lower interest rates decrease the opportunity cost of holding non-yielding gold.

* According to the CME’s FedWatch tool, traders currently anticipate a 67% chance of the Fed cutting interest rates in September.

* Data showed that U.S. job openings increased in May following experiencing significant declines in the previous two months. However, the trend remains consistent with easing labor market conditions.

* The minutes of the Fed’s June meeting are scheduled for release at 1800 GMT. Additional employment data is expected throughout the week, including ADP employment, weekly jobless claims later today, and nonfarm payrolls on Friday.

* Spot silver climbed by 0.2% to $29.56, platinum rose 0.6% to $996.64, and palladium decreased by 0.8% to $978.80.

* South African company Impala Platinum reported a strike on Tuesday at part of its recently acquired Bafokeng operations in Rustenburg. The company stated that the strike primarily involved contractors demanding permanent positions.

DATA/EVENTS (GMT)

0145 China Caixin Services PMI June

0750 France HCOB Serv, Comp PMIs June

0755 Germany HCOB Services PMI June

0755 Germany HCOB Comp Final PMI June

0800 UE HCOB Services, Comp Final PMIs June

0830 Royaume-Uni S&P Global PMI : Comp – Output June

0830 UK Reserve Assets Total June

1230 American International Trade May

1230 US Initial Jobless Clm Weekly

1345 US S&P Global Comp, Svcs Final PMis Juin

1400 US Factory Orders MM May

1400 US ISM N-Mfg PMI Juin

1800 The US Federal Open Market Committee publishes the minutes of its meeting of June 11 and 12

Gold Prices Edge Higher Amidst Dollar Weakness

Gold prices inched upwards on Wednesday, buoyed by a weakening U.S. dollar as investors eagerly awaited the minutes from the Federal Reserve’s recent policy meeting for clues regarding the timing of potential interest rate cuts.

Key Fundamental Factors

• Spot gold saw a rise of 0.1%, reaching $2,331.41 per ounce by 0026 GMT. Meanwhile, U.S. gold futures gained 0.3%, settling at $2,340.50.
• The U.S. dollar experienced a decline, making gold more appealing to buyers who hold other currencies.
• Fed Chair Jerome Powell reiterated on Tuesday that the American economy is on track to achieve disinflation, but emphasized the need for more data before contemplating interest rate cuts to confirm the veracity of recent weaker inflation figures.
• Lower interest rates generally reduce the opportunity cost associated with holding non-yielding assets like gold.
• The CME’s FedWatch tool reflects a current market anticipation of a 67% likelihood of a Fed rate cut in September.
• Data released on Tuesday revealed that job openings in the U.S. rose in May following witnessing significant dips in the preceding two months. However, the overall trend remains aligned with a cooling labor market.
• The minutes from the June Fed meeting are scheduled for release at 1800 GMT. The week will also feature other key employment data points, including ADP employment figures, weekly jobless claims later today, and the nonfarm payrolls report on Friday.
• Spot silver experienced a 0.2% jump, hitting $29.56, while platinum gained 0.6%, settling at $996.64. Palladium, on the other hand, slipped by 0.8% to $978.80.
• Impala Platinum, a South African company, reported a strike on Tuesday at a portion of its recently acquired Bafokeng operations in Rustenburg. The strike, primarily involving contractors, centered around demands for permanent positions.

Data and Events (GMT)

Time	Event
0145	China Caixin Services PMI June
0750	France HCOB Serv, Comp PMIs June
0755	Germany HCOB Services PMI June
0755	Germany HCOB Comp Final PMI June
0800	UE HCOB Services, Comp Final PMIs June
0830	Royaume-Uni S&P Global PMI: Comp – Output June
0830	UK Reserve Assets Total June
1230	American International Trade May
1230	US Initial Jobless Clm Weekly
1345	US S&P Global Comp, Svcs Final PMis Juin
1400	US Factory Orders MM May
1400	US ISM N-Mfg PMI Juin
1800	The US Federal Open Market Committee publishes the minutes of its meeting of June 11 and 12

The release of the Fed’s minutes is expected to be a key driver of market sentiment in the coming days. Investors will closely scrutinize the document for any hints regarding the future direction of monetary policy, particularly regarding the potential for rate cuts.