Precious: Gold slips after strong US data as focus turns to Powell

Applied Energetics

27/06/2023 14:49

(Rewrites, add details, comment, updates prices)

        * 
      Silver set for third session of gains
    

        * 
      U.S. home sales up 12.2% in May vs. 3.5% in April
    

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      Gold down more than 2% in June so far
    

  
    By Deep Kaushik Vakil
       June 27 (Reuters) - Gold reversed course to slip on
Tuesday after strong U.S. economic readings, while traders
positioned for Federal Reserve Chair Jerome Powell's speech and
more data that could offer clues on future interest rate hikes.
    Spot gold  XAU=  dropped 0.2% to $1,918.19 per ounce by
10:37 a.m. EDT (1437 GMT), while U.S. gold futures  GCcv1  fell
0.3% to $1,927.70.
    U.S. consumer confidence increased in June to the highest
level in nearly 1-1/2 years, while new single-family home sales
rose by a more-than-expected 12.2% in May. 
    "Gold did not like the news," said Edward Moya, senior
market analyst at OANDA, as "that better economic data is going
to drive those Fed tightening expectations and that should push
up yields as well."
    Benchmark 10-year Treasury yields climbed, making
zero-interest-bearing gold less attractive.  US/ 
    Bullion edged up on Monday on risks from the short-lived
mutiny in Russia. 
    But for gold, "the key question is the extent to which the
internal tensions within Russia or any potential toppling of the
government might affect global monetary policy," Commerzbank
analysts wrote in a note.
    Gold has shed about 2.2% this month - set for a second
consecutive monthly fall if losses hold - as bets for
higher-for-longer U.S. interest rates dented the zero-yielding
asset's appeal and overshadowed its traditional safe-haven role
to some extent.
    Investors were awaiting Fed Chair Jerome Powell's upcoming
speech, along with a trove of key economic data on Thursday. 
    "Between now and Thursday, you're going to see a drifting,
no-man's-land trading, sideways market here in gold, unless
something else was to break," said Bob Haberkorn, senior market
strategist at RJO Futures.
    Silver  XAG=  advanced 0.6% to $22.91 an ounce and was bound
for a third straight session of gains. 
    Platinum  XPT=  fell 0.8% to $916.43 and palladium  XPD= 
was down 0.6% to $1,298.05.

 (Reporting by Deep Vakil in Bengaluru; editing by David Evans)
 ((DeepKaushik.Vakil@thomsonreuters.com;))