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Gold Aug '24 (GCQ24)

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Gold Futures Market News and Commentary

Dollar Moves Higher and Gold Tumbles on Hawkish Fed

The dollar index (DXY00) Thursday rose by +0.52%.  The dollar rallied Thursday on positive carryover from Wednesday when the FOMC projected only 25 bp of rate cuts this year compared to 75 bp of rate cuts back in March.  Gains in the dollar were limited after US May producer prices rose less than expected, and weekly initial unemployment claims unexpectedly rose to a 10-month high, dovish factors for Fed policy.

US weekly initial unemployment claims unexpectedly rose +13,000 to a 10-month high of 242,000, showing a weaker labor market than expectations of a decline to 225,000.

US May PPI final demand unexpectedly eased to +2.2% y/y from +2.3% y/y in April, weaker than expectations of an increase of +2.5% y/y.  May PPI ex-food and energy unexpectedly eased to +2.3% y/y from +2.5% y/y in April, weaker than expectations of +2.5% y/y.

The markets are discounting the chances for a -25 bp rate cut at 12% for the July 30-31 FOMC meeting and 65% for the following meeting o... Read more

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