Gold falls to nearly 11-week low before recovering; check outlook for today
Gold is still not out of the woods as oil prices remain elevated with an upside risk. (AI image) Gold price prediction today Gold prices
Gold is still not out of the woods as oil prices remain elevated with an upside risk. (AI image) Gold price prediction today Gold prices continue to be under pressure as crude oil prices remain high, says Praveen Singh, Head Currencies and Commodities, Mirae Asset ShareKhan. Gold Performance On June 8, spot gold extended its decline to $4268 -- lowest since March 23-- as Middle East tensions escalated yet again with Iran and Israel trading military strikes. Consequently, oil prices surged that further amplified rate hike concerns on inflation worries. However, the yellow metal recovered as Iran and Israel eventually ended their attacks. At the time of writing, spot gold was trading with an intra-day gain of 0.39% at $4345. Earlier, in the week ending June 5, the shiny metal slumped 4.67% on a much stronger-than-expected US non-farm payroll report (May) and stalemate in US-Iran negotiations as Israel and Lebanon continued to attack each other despite ceasefire announcements in the US on Wednesday. Geopolitics and oil Israel and Iran engaged in a skirmish on Sunday, with Israel intercepting Iran’s airstrikes while striking targets in Tehran and Mahshahr on Monday. Iran, in a rare display of taking cudgel on behalf of its proxy Hezbollah, began its offensive with a warning that it will target all oil and gas facilities linked to Israel, the US and their allies in the region if attacks on its own energy infrastructure continue.
Yemen's Houthis, another Iranian proxy, also fired missiles on Israel as they vowed to ramp up the attack depending on the situation. Israel continues to maintain that it cannot allow any ceasefire term concerning Hezbollah. Crude oil prices, which had slumped over 2% on Friday, surged over 5% on Monday before trimming the intra-day gains to 1.5% at the time of writing as Israel and Iran ended their strikes. Data roundup NY one-year inflation expectations data released on Monday showed that expectations eased from 3.64% to 3.46% Vs the estimate of 3.72%, which also helped gold recover. The US non-farm payroll report, released on Friday, was robust. US employers added 172K jobs in May, nearly twice the estimate of 88K jobs. Two-month payroll revision was 93K, a sharp variation from the trend of hefty job revisions. Average hourly earnings came in at 0.3% (forecast 0.3%, prior 0.2%), while earnings grew 3.4% y-o-y -- in line with the forecast-- though lagged the prior month's pace of 3.6% y-o-y. Average weekly hours of all employees at 34.3 matched the estimate and the previous month's data. Labour force participation rate and unemployment rate were steady at 61.8% and 4.3%, respectively. It was the third consecutive encouraging job report, which will alleviate the Fed’s concerns about the labour market; thus, rate hike probability has increased. US Dollar Index and yields At the time of writing, the US Dollar Index at 99.95 was down 0.10%.
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