GOLD STEADY AMID US HOLIDAY AS DATA FUELS RATE CUT SPECULATION

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  • Gold remains virtually unchanged during the North American session due to thin volume.
  • US Retail Sales and Industrial Production data hint at an economic slowdown, boosting rate cut expectations.
  • FedWatch Tool shows 67% chance of September rate cut with December 2024 futures implying 36 bps of easing.

Gold's price barely moved Wednesday during the North American session as traders remained absent in observance of the Juneteenth holiday. Data from the United States (US) continued to weaken, a sign of relief for traders who remain confident the Federal Reserve (Fed) will ease policy twice this year. Therefore, precious metals recover some ground, yet XAU/USD is virtually unchanged and trades at $2,328 at the time of writing.

US Retail Sales in May improved compared to April, but they were revised downward, hinting that the economy is slowing down. This data, along with last week’s big consumer inflation report, increased the odds of a September rate cut.

Other data showed that Industrial Production improved in May, followed by a downward revision in April.

The CME FedWatch Tool shows that odds for a 25 basis points (bps) rate cut for September,  stands at 67%, up from 61% a day ago. In the meantime, the December 2024 Fed funds futures contract implies the Fed will cut 36 bps toward the end of the year.

In the meantime, Fed speakers entertained Gold traders on Tuesday, saying that inflation remains high and that they need more evidence that inflation is evolving to reach the 2% core inflation goal.

US Treasury bond yields remained subdued. Still, the 10-year Treasury note yield is down one-and-a-half basis points to 4.215%.


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