• Gold Price renews three-month low after five-day losing streak, pressured of late.
• Hawkish central bank actions amplify economic fears and underpin US Dollar demand, weighing on XAU/USD.
• Mostly upbeat United States data, upbeat statements from Federal Reserve Chairman Jerome Powell also bolstered USD and favored Gold sellers.
• Preliminary readings of PMIs for June eyed for further directions of Gold Price as it approaches $1,900 support confluence.

Gold Price (XAU/USD) remains depressed at the lowest levels since mid-March as bears attack $1,913 level as the XAU/USD traders begin Friday’s Asian session with bears in power. That said, the bullion dropped the most in two weeks the previous day after major central banks and their policymakers advocated for higher rates, which in turn suggests more toll on the global economy amid tighter labor markets and higher inflation. The same joins the hawkish comments from the US Federal Reserve (Fed) Chairman Jerome Powell and mostly upbeat United States data to favor the US Dollar and weigh on the Gold Price.

Gold Price drops on central banks’ hawkish play

Gold Price declines in the last five consecutive day as bears prod the lowest levels in three months amid hawkish central bank actions, as well as the mixed US data. That said, a slew of central banks announced interest rate increases on Thursday. Among them, majority crossed the market consensus but failed to impress the respective currencies amid fears that the broad  rate hikes has its economic toll, which in turn directs the market players toward the US Dollar’s haven demand and drown the Gold Price.

That said, the Bank of England (BoE), informally known as the “Old Lady”, surprised markets by lifting benchmark rates by 50 basis points (bps) to 5% versus major expectations favoring a 0.25% rate hike.

Further, the Swiss Natinoal Bank (SNB) matched market forecasts while announcing 25 basis points of increase in its benchmark interest rate, to 1.75%. This was the fifth consecutive rate lift from the Swiss central bank. Additionally, the Central Bank of the Republic of Türkiye (CBRT) hiked rates for the first time since August 2021 whereas the Norges Central Bank announced rate increases.

Fed Chair Powell, US data weigh on XAU/USD price

Apart from the aforementioned rate hikes, hawkish statements from Fed Chair Jerome Powell also underpinned the US Dollar and joined mostly upbeat US data to propel the US Dollar and weigh on the Gold price.

On Thursday, Fed Chairman Jerome Powell repeated most of his previous day’s remarks during his testimony 2.0, this time in front of the Senate Housing Committee. However, his statements like, “(It) will be appropriate to raise rates again this year, perhaps two more times,” allowed the US Dollar to refresh the intraday high while eyeing to reverse the Wednesday’s losses.

On the same line, Federal Reserve (Fed) Governor Michelle Bowman said that "Additional policy rate increases" will be needed to reach a sufficiently restrictive level and control inflation.

Talking about the data, US Chicago Fed National Activity Index for May dropped to -0.15 versus 0.0 expected and upwardly revised 0.14 previous readings. Further, the Initial Jobless Claims reprinted the 264K figures (revised) for the week ended on June 16 compared to 260K market forecasts. It’s worth noting that the Continuing Jobless Claims dropped unexpectedly to 1.759M from 1.772M (revised) prior and 1.782M analysts’ estimations. Additionally, US Existing Home Sales marked a surprise recovery by 0.2% MoM for May compared to -0.6% expected and -3.2% prior (revised from 3.4%).

It should be noted, however, that the recent downbeat comments from Thomas Barkin, President of the Federal Reserve Bank of Richmond, allow the Gold Price to lick its wounds near the multi-month high. However, the bearish trend remains intact.

Amid these plays, Wall Street benchmark closed mixed but the US Treasury bond yields were firmer.

Moving on, preliminary readings of the June month’s PMIs for the key economies will be crucial to watch for the intraday directions. However, major attention will be given to the market’s reaction to the recently hawkish central bank actions