Comex gold contract Delivered in Aug. Down $27.40 to close at $1,736.50 an ounce.
Gold futures ended yesterday down $37.60, or 2.09 percent, to $1,763.90 an ounce. This is the lowest closing level since December 2021. by being affected by the dollar’s appreciation which will reduce the attractiveness of gold by making gold contracts more expensive for holders of other currencies
Although gold is seen as a hedge once morest inflation. It is a safe haven when the market is concerned regarding a recession. But the Federal Reserve’s commitment to accelerating interest rates to curb inflation has overshadowed such positive factors This is because a rebound in interest rates increases the opportunity cost of holding gold. Because gold is an asset that does not return in the form of interest.
The Dollar Index, which measures the movement of the dollar once morest the six major currencies in a basket of currencies. steadily rising today Recently, it surpassed 107 level, hitting a new record in 20 years, with investors flocking to the dollar as a safe haven currency. While there were concerns regarding the recession.
Investors are worried regarding the US economy. After the US bond market experienced an inverted yield curve, short-term bond yields jumped above long-term bonds. which indicates the trend of an economic recession
In addition, the US Federal Reserve (Fed) has signaled the economy is entering a recession as well.
The Atlanta Fed revealed that The latest GDPNow forecast model shows that The US economy contracted 2.1% in the second quarter, from an earlier indication of a 1.0% contraction.
GDPNow forecasts show that the US economy contracted in the second quarter more severely than the 1.6% contraction in the first quarter, indicating that the US economy has entered a recession. because the economy contracted for 2 consecutive quarters
The Atlanta Fed will report new GDPNow forecasts tomorrow. The US Department of Commerce will release its first estimate for second-quarter gross domestic product (GDP) on July 28.
Fed Chairman Jerome Powell said earlier that The Fed is committed to curbing inflation. Although the use of a tightening monetary policy will slow down economic growth. But it will not create a serious risk.
“We are committed to using all the tools we have to bring inflation down. This action is to reduce economic expansion. which despite the risk But I don’t see this as the biggest risk to the economy. One of the more common mistakes that might have been a failure to stabilize prices,” Powell said.
Investors are eyeing the release of the minutes of the Fed’s meeting on June 14-15 today. Including the number of non-farm payrolls on Friday.
by analysts that The number of jobs added only 250,000 in June. Below 390,000 positions in May and the unemployment rate is expected to remain stable at 3.6%.
