Gold and Expected Growth Paths:
Global gold prices rose during this period of trading on Wednesday,
as investors await the minutes of the latest Federal Reserve policy meeting for new signals
about when the U.S. central bank might start cutting interest rates.
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Details:
The gold market has been moving within a narrow range for a few weeks now, and bullion prices may rise later this year with the start of election season around the world. Ahead of the release of the Federal Reserve meeting minutes, Chairman Jerome Powell said on Tuesday that the United States has returned to a “deflationary path,” but policymakers need more data before cutting interest rates to ensure that recent weaker inflation readings reflect the true state of inflation and the economy.
Powell noted that the slowdown in the core personal consumption expenditures (PCE) rate to 2.6% in May shows the effectiveness of the Federal Reserve’s monetary policy and that the bank wants to ensure that these levels are a true reading of core inflation. Meanwhile, investors are awaiting ADP employment data and weekly jobless claims data scheduled for release later today, in addition to the non-farm payroll (NFP) report due on Friday. Market analysts believe that the release of this week’s non-farm payroll report could influence expectations for an interest rate cut.
Gold and Expected Growth Paths