Gold declines below $2,000/oz as the market looks for Fed rate rise hints

Pressured by a stronger dollar and higher Treasury yields, gold reversed direction and fell below the important $2,000 per ounce threshold as investors searched for clues as to whether the market will witness a “one and done” rate hike by the U.S. Federal Reserve in May. After climbing as high as 0.6 percent earlier in the session, spot gold was down by 0.6% at $1,990.58 per ounce. U.S. gold futures decreased by 0.6% to $2,003.”I wouldn’t be surprised to see gold hit a new record high in the coming weeks,” Wyckoff added.

The trend for gold is still upward. Carlo Alberto De Casa, the external analyst at Kinesis Money, called the $1,980-$2,000 area a promising support zone for bullion. Before going into a blackout period starting on April 22 ahead of the Fed’s May 2­3 meeting, investors will be concentrating on the Fed officials’ remarks this week. Spot silver prices dropped 1.2 percent to $25.03 per ounce, platinum prices rose 0.5 percent to $1,050.14, and palladium prices increased 2.8 percent to $1,544.81.

While investors watched Chinese economic data for indications of a resurgence in demand in the second-largest oil consumer in the world, crude oil prices nudged up marginally on the back of OPEC+’s promises to cut more output. Brent crude futures edged up 6 cents to $86.37 per barrel, while U.S. West Texas Intermediate crude rose 3 cents to $82.55 per barrel.

After the International Energy Agency (IEA) predicted record demand in 2023 of 101.9 million barrels per day (bpd), up 2 million bpd from last year, both contracts recorded their fourth weekly gains last week, the longest such streak since mid-2022. However, the IEA said in its monthly report that the output reductions planned by OPEC+ countries ran the danger of worsening the anticipated oil supply deficit in the second half of the year, which may harm consumers and global economic recovery.

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