The report reflecting the muted U.S. economic activity had an impact on gold’s marginal -0.01% decline to 71,732. Along with notable lower adjustments for April and only a marginal rise in U.S. retail sales for May, this data has kept hopes alive for at least one interest rate cut by the Federal Reserve this year.
A rate cut in September is now more likely, with the CME FedWatch tool indicating a 67% chance, up from 61% the day before. Regarding the recent decline in inflation data, the President of the Dallas Federal Reserve Bank noted that while it is encouraging, more consistent data is still needed to make a firm prediction about when inflation would return to the 2% target.
The Hong Kong Census and Statistics Department reports that, in the worldwide market, gold imports via Hong Kong to China fell by 38% in April over March. In India, demand for gold remained low despite a recent price adjustment as buyers postponed purchases because there were no significant festivals, and jewelers were not urgently refilling inventories because the wedding season was coming to an end.
Indian traders thus provided up to a $10 per ounce discount over official domestic prices. Dealer premiums over foreign spot prices fell to $18–$26 per ounce in China this week from $27–$32 the week before, as high spot prices and poor consumer sentiment were the main causes.
