Hawkish Fed, other bearish factors hurting gold
gold recovered on Thursday and Friday ahead of the key US PCE inflation data due Friday. Spot gold managed to recover nearly 2% from the weekly low of $2293 as it rallied to $2339 level; however, the metal gave back some of its gains on the much awaited US PCE inflation data (May) coming in line with the forecast. The yellow metal closed with a loss of $1 at $2326 on Friday; it was up nearly 0.30% on the week though.
The US Dollar Index gained further ground on Trump gaining an edge over Biden in the presidential debate Friday, though it gave back some of its gains on healthy risk appetite. The Index closed with a loss of 0.04% at 105.84 on Friday; it was up around 0.04% on the week. The ten-year US yields at 4.38% were up 2.28% on the day and were up around 4% on the week. The two-year yields were up 0.20% on the week as they closed around 4.75%.
Fedspeak
Fed officials continue to hold a calibrated hawkish stance as they have been indicating that they are in no hurry to cut rates and they essentially want more evidence on inflation moving towards the Fed's goal of 2%.
Data round-up
The US Q1 GDP data (Q1 annualized q-o-q final reading) matched the forecast of 1.4% and was above the initial estimate of 1.30% but personal consumption was revised lower to 2% from 1.50% estimated earlier. The PCE deflator inflation data (May) released Friday were in line with the expectations, though the data showed that the Fed's preferred inflation metric eased from May. Personal income was better than expected but spending
