Global Gold Up 0.1%, Traded Tightly Awaiting Fed Decision

On Wednesday, world gold prices rose slightly due to a weakening dollar and concerns about the Fed regarding the upcoming interest rate decision. Information on world spot gold today is summarized in its entirety based on reports from Tradingview.com. The spot gold price rose by 0.1% to $1,963.86 per ounce at 0220 GMT. Meanwhile, the US gold futures price was recorded at $1,979.70. The weakening of the dollar index (DXY) caused gold prices to be traded cheaply for buyers using other currencies. This provided additional support for gold prices. The upward trend in gold prices remains intact, and the big question now is when the Federal Reserve (The Fed) will stop its interest rate hike campaign. Ilya Spivak, head of global macro at Tastylive, said that when there is more clarity on this, gold prices could rise even higher.

"If the Fed ends up looking more hawkish because inflation is more persistent, with headwinds like the debt ceiling removed, the risk is significant," he said. In this context, the statement refers to the possibility that the Federal Reserve could adopt a more hawkish stance, that is, a tighter policy on inflation. If the Fed views higher inflation as something that is going to persist for a longer period of time, then they may take more aggressive action to raise interest rates and control inflation. Bullion, like gold, which does not pay interest, tends to become less attractive in a high interest rate environment.

Supply pressures have eased in May, according to data released by the New York Federal Reserve on Tuesday, gradually easing one of the main factors that has been driving inflationary pressures around the world. Ahead of next week’s Federal Reserve meeting, the May U.S. consumer price report due on June 13 will give investors more clarity on the health of the world’s largest economy, given recent mixed economic data and dovish statements from Fed officials. Fed fund futures show traders are pricing in an 80.6% chance that the Fed will keep interest rates unchanged at 5%-5.25%, according to CMEGroup’s Fedwatch tool. However, they see a 51% chance of another 25 basis point hike in July. Meanwhile, China’s May trade data tops the Asia-Pacific economic data and event calendar on Wednesday, drawing investor interest to see if the surprise import downturn in April will repeat itself.

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