(RTTNews) – Gold prices were subdued on Thursday, with a stronger dollar and rising expectations of a Federal Reserve rate hike this year weighing on the precious metal.
Spot gold dipped 0.3 percent to $3,989 an ounce, hovering near its lowest since November after having fallen below $4,000 an ounce to hit a more than seven-month low in the previous session. U.S. gold futures were down 0.1 percent at $4,005 an ounce.
The dollar headed for its biggest monthly gain in almost a year ahead of the release of key U.S. economic data later in the day.
Investors await U.S. PCE price index data for May along with a final reading on Q1 GDP and weekly jobless claims figures for additional clues on the outlook for rates and economic growth.
Inflation concerns persist despite oil prices extending their slide to levels seen before the Middle East conflict on signs of improving flows through the Strait of Hormuz, a key maritime route that handles around one-fifth of global oil supplies.
In an interview with CNBC on Wednesday, U.S. Treasury Secretary Scott Bessent applauded Fed Chair Kevin Warsh’s plan to reduce forward rate guidance but said the Fed should keep an open mind about the inflationary effects of high energy prices caused by the Iran conflict.
The PCE inflation report is likely to show core prices rose 0.3 percent in May, putting the annual rate at 3.4 percent.
The headline inflation rate is forecast at 0.5 percent sequentially and 4.1 percent year-over-year.
CME FedWatch tool indicates that markets are now pricing in at least one rate increase this year.
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