InfoQuest – Gold futures prices fell more than 20 percent, falling below the $2,310 level, under pressure from a stronger dollar. US government bond yields rebound.
At 9:19 PM Thailand time, gold contracts will be delivered on the COMEX (commodity exchange) market in August. Minus $21.00, or 0.9%, to $2,309.80 per ounce.
A stronger dollar reduces the attractiveness of gold. By making gold contracts more expensive for holders of other currencies at the same time, a rebound in US government bond yields will increase the opportunity cost of holding gold. This is because gold is an asset that does not have a return in the form of interest.
In addition, gold prices were also affected by Michael Bowman, a member of the Federal Reserve Board of Governors (Fed) and permanent member of the Fed's Monetary Policy Committee (FOMC), saying that at this time it is not yet time to cut interest rates. He is open to raising interest rates if inflation still does not fall
Investors will be watching the Personal Consumption Expenditures (PCE) price index scheduled for release on Friday. The Personal Consumption Expenditures Index is the Fed's preferred measure of inflation. Because it can detect changes in consumer behavior and covers the prices of goods and services more broadly than the Consumer Price Index (CPI).
Analysts expect the headline personal consumption expenditures index, which includes food and energy categories, to rise 2.6% year over year in May from 2.7% in April.
When compared month-on-month, the overall PCE index is expected to remain unchanged in May. Or it rose by 0.0% from 0.3% in April.
As for the Core Personal Consumption Expenditure (Core PCE) index, which does not include the food and energy categories. It is expected to rise by 2.6% in May year-on-year from 2.8% in April.
On a monthly basis, the core PCE index is expected to rise 0.1% in May from 0.2% in April.
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