Gold plummeted because of economic data

31 May 2023

The dollar retreated from 10-week highs amid some profit taking and in anticipation of the data. But an increasingly hawkish outlook on the Fed kept the greenback relatively underpinned, while darkening the outlook for non-yielding assets such as gold.

Rising interest rates push up the opportunity cost of investing in non-yielding assets - a trend that battered gold through 2022.

Still, the yellow metal may see increased safe haven demand in the event of a U.S. default, which is likely to trigger a recession. U.S. lawmakers are set to vote this week on passing a bipartisan bill to raise the debt ceiling and avert an economic crisis.

But several Republican and Democrat lawmakers have signaled discontent with the bill, and plan to vote against it in Congress.

Spot gold fell 0.2% $1,955.14 an ounce, while gold futures steadied at $1,973.25 an ounce by 22:42 ET (02:42 GMT). Both instruments rallied nearly 1% on Tuesday, recovering from over two-month lows.

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✅𝖳𝖯1 1962
✅𝖳𝖯2 1965
✅TP3 1970

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𝖷𝖠𝖴𝖴𝖲𝖣 SELL LIMIT 1965 - 1969 💯💯

✅𝖳𝖯1 1962
✅𝖳𝖯2 1960
✅TP3 1955

🛑𝖲𝖫 1975