Gold prices retreated after experiencing their most significant weekly gain in three months, as central bank activities came under scrutiny.
Bullion was trading near $2,375 an ounce, following a nearly 3% rally last week. The People’s Bank of China (PBOC) refrained from adding to its gold reserves for the second straight month in June. However, data suggests that both the Reserve Bank of India and the National Bank of Poland increased their holdings, according to a senior analyst at the World Gold Council.
“Gold is giving back some of Friday’s session gains,” noted Saxo Bank A/S in a report. “In the long term, we anticipate investors will remain bullish on gold due to ongoing uncertainties about the U.S. economy and the unsustainability of the U.S. deficit.”
Gold has surged this year, reaching a record high in May, driven by central-bank purchases, geopolitical tensions, and expectations of a Federal Reserve interest rate cut later in the year. Federal Reserve Chair Jerome Powell is expected to inform lawmakers during his semiannual testimony on Tuesday and Wednesday that the Fed needs more evidence of economic cooling before lowering rates. The U.S. consumer price index (CPI) data for June, scheduled for release on Thursday, could further influence expectations of monetary easing. Core CPI, excluding food and energy costs, is projected to have risen 0.2% for the second month in a row, the smallest back-to-back gains since August.
Despite gold’s decline on Monday, European stocks edged higher as traders reacted to the unexpected results of France’s snap election. Initially, investors were concerned about the possibility of a far-right takeover. However, the inconclusive outcome, which limits the influence of both the left-wing coalition and Marine Le Pen’s National Rally, is seen as positive.
Spot gold fell 0.7% to $2,375.06 an ounce by 2:16 p.m. in London. The Bloomberg Dollar Spot Index remained stable, as did 10-year Treasury yields. Platinum, silver, and palladium also saw declines.
Leave feedback about this