Gold prices fell today, with the dollar fluctuating, moving the precious metal away from a record peak recorded in the previous session due to supportive factors such as growing bets that the Federal Reserve (the US central bank) will begin lowering interest rates at a later time, and crude oil prices also declined in global markets. While geopolitical risks increased demand for safe haven assets.
Gold in spot transactions fell 0.3% to $2,418 per ounce, and US gold futures contracts for June delivery fell 0.72% to $2,421.30 per ounce.
Low interest rates and geopolitical fluctuations make gold a preferred investment.
As for other precious metals, silver fell in spot transactions by 0.51% to $31.65 per ounce, after reaching the highest level in more than 11 years in the previous session.
Platinum fell 0.7% to $1,039.31 per ounce, after recording its highest levels since May 12, 2023.
The dollar is oscillating
As for the dollar, it faced difficulties in determining its direction today, as traders adhered to their opinions regarding the expected timing of easing US monetary policy this year.
Digital (encrypted) currencies rose, supported by a jump in the price of the Ethereum currency, amid growing anticipation for the imminent approval of exchange-traded funds by the US Securities and Exchange Commission.
The euro rose 0.13% to $1.087.
Investors expect that today’s data issued by the European Central Bank on the wage index and purchasing managers’ index in the euro zone will provide more evidence about the monetary easing cycle in the euro zone.
With little US economic data this week to guide currency movements, traders’ focus is turning to a set of comments from Federal Reserve bank presidents searching for clues about US interest rate expectations and when the monetary easing cycle could begin.
On Monday, many officials called for continued cautious monetary policy, even after data last week showed a welcome decline in consumer price pressures last April. Against a basket of major currencies, the dollar fell 0.07% to 104.5 points
As for cryptocurrencies, Ethereum jumped 18% in the last 24 hours to $3,661, while Bitcoin breached the $70,000 level and registered in its most recent transactions stability at $70,984.
Oil
As for oil, its prices declined in early Asian trading, with investors expecting that inflation and continued high interest rates in the United States will lead to a decline in consumer and industrial demand.
Brent crude futures fell 69 cents, or 0.82%, to $83 per barrel, and US West Texas Intermediate crude fell 64 cents, or 0.80%, to $79.16 per barrel.
Both benchmarks fell less than 1% yesterday after Federal Reserve officials said they were waiting for more signs of slowing inflation before considering cutting interest rates.
Fed Vice Chairman Philip Jefferson said yesterday that it was too early to know whether the inflation slowdown was “long-term,” while Michael Barr, the Fed’s Vice Chairman for Oversight, said that the restrictive policy needed more time.
Atlanta State Fed Chairman Raphael Bostic said it “will take some time” for the central bank to become confident that the slowdown in price growth is sustainable.
Lower interest rates reduce borrowing costs, which contributes to freeing up funds that may help boost economic growth and demand for crude.
The market seemed unfazed by the state of political uncertainty in two major oil-producing countries after the death of Iranian President Ebrahim Raisi in a helicopter crash and Saudi Crown Prince Mohammed bin Salman postponed his visit to Japan due to health problems of Saudi King Salman.
It is expected that Iranian oil policy will not be affected by the sudden departure of the president, as Iranian Supreme Leader Ayatollah Ali Khamenei enjoys absolute authority and has the final say on all state affairs.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC Plus, are scheduled to meet on June 1.
Reuters quoted informed sources earlier that OPEC Plus may extend some voluntary cuts if demand does not increase.
