Gold jumps as the dollar, yields dip
2023-06-09
Summary:
World stocks rose on Thursday and Treasury yields edged lower as investors leaned toward bets that the U.S. Federal Reserve is likely to abstain from raising interest rates next week.
World stocks rose on Thursday and Treasury yields edged lower as investors leaned toward bets that the U.S. Federal Reserve is likely to abstain from raising interest rates next week.
The number of Americans filing new claims for unemployment benefits surged to their highest in over 1.5 years, but layoffs are probably not accelerating as the data covered the Memorial Day holiday.
Gold climbed more than 1%, buoyed by dollar weakness. Oil slipped over 1.5% as a larger-than-expected rise in U.S. gasoline inventories had raised concerns about demand.
Commodities
The U.S. consumer inflation report for May, due on June 13, could provide more clarity about the health of the world’s largest economy after the job report.
‘This data shows a further weakness in the U.S. economy, which is good news for gold as it will allow the Fed to be on hold,’ said Edward Moya, senior market analyst at OANDA.
Brent crude prices were just below $76 a barrel, little changed from where they were before Saudi Arabia announced on Sunday it would cut 1 million bpd.
A report that the U.S. would give Iran sanctions relief to export oil in return for Tehran reducing uranium enrichment was denied by the White House National Security Council.
Forex
The euro gained despite data showing that the euro zone economy was in a technical recession in the first three months of 2023.
The ECB is expected to raise rates by 25 bps when it meets next week, to be followed by another 25-bps increase in July, taking rates to 3.75%.
The dollar tumbled 1.20% against the Swiss franc to 0.899, the lowest since May 23. SNB Thomas Jordan repeated his commitment to fight "stubborn" inflation in his final public appearance before the central bank announces its next interest rate decision.
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