Gold riding on US disinflationary trends; US retail sales and housing data in focus
Gold prices mostly edged higher during the week, as the dollar doom started with last week’s NFP data. Friday’s labour data showed signs of slowdown in the jobs market, with non-farm payrolls falling to a two and half year low of 209K job additions. Meanwhile, US inflation print released during the week prompted further pain for the greenback.
In the recent Beige book survey, the Federal Reserve said the US economy has shown an overall increase in activity since late May, though most regions expect the pace of expansion to weaken. Three Federal Reserve officials on Monday said policymakers will need to raise interest rates further this year to bring inflation back to the central bank’s goal. Cleveland Fed chief Loretta Mester, speaking at an event hosted by the University of California, said her own view also “accords with” Fed officials’ median forecast for two more rate increases.
Most policymakers expect to increase rates by a further half percentage point by the end of the year, according to projections released after their June gathering. At the same time, officials also acknowledged that the end of the current monetary policy tightening cycle is getting close. Hawkish comments from Fed officials at the start of the week prompted some weakness in the yellow metal.
The US Federal Reserve Vice-chair for Supervision, Michael Barr, said the Fed is close, but still has a bit of work to do. However, the major dollar unwinding happened after the US CPI data on Wednesday. US inflation pressures are showing broader signs of moderation with both headline and core rates undershooting expectations in June.
Read more on economictimes.indiatimes.com
