Gold rises on hopes for interest rate cut during June and lower dollar

Gold prices rose today, Monday, with renewed bets that the Federal Reserve (the US central bank) will begin lowering interest rates in June, and with the decline of the dollar, which enhanced the appeal of the yellow metal.

By 0648 GMT, gold rose 0.1% to $2,166.39 per ounce. US gold futures rose 0.4% to $2,167.70 an ounce.

According to Reuters, the dollar fell 0.1% against other currencies, making gold less expensive for holders of those currencies.

“The environment still appears to be quite good for the precious metals markets,” said Tim Waterer, chief market analyst at KCM Trading.

He added, “Markets are still looking forward to an imminent cut by the Federal Reserve in interest rates. “June appears to be the most likely month for the first interest rate cut to begin.”

Gold prices rose to their highest levels ever on Thursday after Federal Reserve policymakers indicated they still expect to cut interest rates by three-quarters of a percentage point by the end of 2024 despite the latest data showing higher inflation.

Lowering interest rates reduces the opportunity cost of holding gold.

According to the CME Group’s Fed Watch tool, market participants now expect 74 percent that the Federal Reserve will begin cutting interest rates in June.

Investors are now waiting for the core personal consumption expenditures price index data in the United States scheduled to be released on Friday to see if this might change the US Federal Reserve’s expectations of cutting interest rates three times this year.

Technical analyst Wang Tao says that gold may break the barrier of $2,161 per ounce and fall to a range ranging from $2,147 to $2,152.

As for other precious metals, silver fell in spot transactions by 0.1% to $24.62 per ounce. Platinum rose 0.2% to $896.23 an ounce. Palladium rose 0.8% to $993.37 an ounce.