The gold price is under further pressure today, after tumbling yesterday to its lowest level this year on the back of strong data out of the US which many predict will keep the Fed on track to raise interest rates further this year.
The latest retail sales figure hit the market at 0.3 percent, which was in line with expectations and marks the second straight month of growth, and shows consumers remain confident even with the threat of higher borrowing costs.
“A trifecta of news, mostly economically positive, were all putting pressure on gold,” said Jeff Wright, executive vice president at GoldMining Inc.
“Retail sales, Empire State numbers were good and add weight towards additional interest rate increases later in 2018,” he said. “The latest boost in short-term interest rates is leading to further U.S. dollar strength which is also leading gold lower.” He added.
Gold is now expected to remain under pressure for the next few weeks as we head into the Fed meeting next month and with a rate hike already priced into the market, the following statement will be the main factor driving the gold price
“I think you’re going to see gold weak into the next Fed meeting on June 13th,” said David Erfle, founder of juniorminorjunky.com
“The sentiment is really, really low in gold, so that is good as far as contrarianism is concerned, but I think you’re going to see $1,280 gold real quick here,” he added.
Even the threat by North Korean leader Kim Jon Ung to pull out of a planned meeting with US president Donald Trump next month because the US conducted military drills with South Korea has failed to help gold and it seems for the time being it is being looked over as a safe haven.
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