By Deep Kaushik Vakil
(Reuters) – Gold prices on Thursday retreated below the key psychological $1,900 level for the first time since mid-March, clobbered by a volley of robust U.S. economic readings that boosted the dollar and bond yields.
Spot gold slid 0.6% to $1,896.19 per ounce by 9:20 a.m. EDT (1320 GMT), hitting a fresh low in 3-1/2 months. U.S. gold futures shed nearly 1% to $1,903.90.
U.S. jobless claims unexpectedly fell last week, pointing to continued labor market strength that also helped to prop up gross domestic product in the first quarter.
The dollar index firmed 0.4%, making bullion less attractive for overseas buyers, while benchmark 10-year Treasury yields rose. [USD/] [US/]
“It was a one-two punch taking gold another leg lower … and then the hawkish central banks haven’t helped out at all,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
Federal Reserve Chair Jerome Powell said most of the central bank’s policymakers expect they will need to raise interest rates at least twice more by year’s end with U.S. inflation well above the 2% goal and a labor market that’s still very tight.
Prices came under pressure from the dollar’s strength, ETF outflows, and resilient equity markets, Streible added. [GOL/ETF] [.N] [MKTS/GLOB]
While gold is considered a hedge against inflation, rising interest rates dull non-yielding bullion’s appeal.
Bullion has dropped more than 3% so far in June and looks set to end the quarter in negative territory for the first time since September 2022, as traders pushed back expectations for an end to the rate hike cycle.
Traders now awaited May’s personal consumption expenditure (PCE) data, the Fed’s favored inflation gauge, due on Friday.
Spot silver fell 0.82% to $22.53 per ounce, while platinum dropped 1.8% to an eight-month low of $894.71.
Palladium dipped 2.2% to $1,221.55, hovering near its lowest since Dec. 2018.
(Reporting by Deep Vakil in Bengaluru; Editing by Conor Humphries)
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