Gold futures prices have declined for the last three consecutive days. This price decline occurs after gold futures hit a record high of $2,413.80 per troy ounce on Friday, April 19th, propelled by rising geopolitical tensions in the Middle East. That being said, gold is still showing a respectable 17.06% gain from one year ago.
According to Jim Wyckoff, senior analyst at Kitco Metals,"Market focus is back on economic reports and the Fed. If we see hot inflation data, then it is going to be harder for the Fed to cut rates and gold could drop to below $2,200." The next major report is Thursday's Q1 GDP reading, followed on Friday by the core PCE inflation data for March: The Fed's preferred inflation gauge. According to experts, the core PCE index is expected to moderate slightly to an annual rate of 2.7% in March from 2.8% in February. The overall PCE is projected to accelerate to 2.6% from 2.5% previously.
A delay in Fed rate cuts makes gold a less attractive portfolio hedge, further explaining this week's pullback after the record run. However, many gold investors are still positioning for an eventual easing cycle, which tends to boost the precious metal's appeal.
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