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Gold Prices Decline Amid Market Anticipation of US Inflation Data and Eased Trade Tensions
Gold Prices Drop to Lowest Level in Over a Month Amid Anticipation of US Inflation Data
Gold prices fell to their lowest level in more than a month during Thursday’s trading, influenced by several factors. The most notable was the market’s anticipation of US inflation data, which could determine the Federal Reserve’s monetary policy direction. Additionally, easing trade tensions between the US and China negatively affected gold’s appeal as a safe haven.
Trade Truce Between the US and China Puts Pressure on Gold
Markets experienced relief following the announcement that Washington and Beijing had reached an agreement to significantly reduce tariffs, alongside declaring a 90-day truce in the trade war that had threatened global economic stability. This development improved investors’ risk appetite, leading them to move away from gold.
Shady Abdo, Chief Analyst at Souq Point Trader Group Brokerage, stated:
"The immediate outlook for gold looks weak today amid positive talks between the US and China, which have reduced gold’s attractiveness as a safe haven."
Abdo added that the US Dollar Index is attempting to recover and noted that if US retail sales and producer price index data come in stronger than expected, gold could face further selling pressure.
Markets Await US Producer Price Index Data
Investor attention is now focused on today’s US Producer Price Index (PPI) data, scheduled for release at 3:30 PM Riyadh time. This follows earlier consumer inflation data released this week, which came in weaker than expected.
Gold at Settlement
Gold futures contracts for June delivery fell by 1.80%, or $59.50, closing at $3,188.30 per ounce, as investors shifted towards higher-risk assets following a reduction in global trade tensions.
Current Performance of Gold and the Dollar
In the spot market, gold prices dropped 1.3% to $3,136.97 per ounce, marking the lowest level since April 10. US gold futures fell 1.5% to $3,140.00.
Conversely, the US Dollar Index declined by 0.3%, reflecting fluctuating investor sentiment toward US monetary policy and upcoming economic data.
