Gold records its worst weekly fall this year on hawkish Fed minutes
Gold recorded its worst weekly slump this year in the week ending May 24 on hawkish FOMC minutes and robust US PMIs. Now, markets largely look for just one rate cut this year as traders readjust their rate expectations in the wake of the US data and the Fed's stance.
Spot gold closed with a gain of 0.24% at $2334 Friday. The gains came on subdued US yields as the ten-year US yields eased by 0.26% to 4.467% Friday. However, the metal tumbled nearly 3.30% on the week after hitting its fresh record high of $2450 on May 20.
The ten-year US yields were up around 1% on the week, which boosted the US Dollar Index that posted a weekly gain of 0.30% at 104.75
Data round up
US durable goods orders data (April preliminary) were released Friday. Headline durable goods orders came in at 0.70% Vs the expectation of -0.80% as even ex transportation data at 0.4% topped the forecast of 0.20%. University of Michigan Sentiment (May Final) was revised higher from 67.70 to 69.10, whereas one-year and 5-10 year inflation expectations at 3.30% and 3% were lower than their respective forecasts of 3.40% and 3.10%.
FOMC minutes of the May meeting were released on May 22. The minutes were hawkish as many policy committee members looked for a higher for longer rate regime, and some of them even questioned whether the rates were restrictive enough to bring the inflation down to the Fed's 2% goal.
S&P Global US manufacturing PMI (May preliminary) came in at 50.90 Vs the forecast of 49.90, while services PMI was noted at 54.80 as against the
