Gold Price Registers Uptick as Softer American Data Raises Rate Cut Possibility

Recently released economic data from the United States indicates that consumer spending may be constrained at the moment. This comes after the U.S. Department of Commerce released a report showing that last month’s retail sales improved in comparison to data from April.

The report has facilitated an increase in the price of gold and led many to speculate that the Fed may soon reduce interest rates, after it stated in the last meeting that the present monetary policy was appropriate. During this period, the U.S. dollar index dropped by .05% to 105.27. Additional data also showed improved industrial production last month.

In addition to economic data, officials at the Federal Reserve have revealed that rates of interest would gradually reduce if the process of disinflation continued to move toward the Federal Reserve’s annual 2% core inflation goal.

John Williams, New York Fed president, stated that things appeared to be moving in the right direction. Susan Collins, Boston Fed president, stated that she wasn’t carried away because of one good read on inflation and noted that the time to reduce interest rates hadn’t yet come. Thomas Barkin, Richmond Fed president, added that he needed to observe more data before easing the cycle.

On the other hand, Alberto Musalem, St. Louis Fed president, noted that before any decision to reduce rates was made, he needed to observe a change in the disinflation process. Musalem added that he favored an increase in rates if inflation came to a standstill.

While many policymakers still have neutral opinions on rates, U.S. Treasury yields show that investors have already begun pricing in decreases in interest rates. Currently, the yield for 10-year treasury notes has dropped by six basis points to reach 4.2%. Figures from the Chicago Board of Trade also show that traders expect easing, particularly through December 2024’s rate contract for fed funds.

Despite the disinflation process continuing, as shown by the consumer price index report, Jerome Powell revealed that the Fed wasn’t as confident about inflation’s progress. This report also heightened the odds of a rate cut later this year, increasing to 62% from 57%.

With regard to gold, it is expected that if the precious metal’s price surpasses $2,350, the price may move higher to June 7’s $2,387 and maybe even hit $2,400. On the other hand, if XAU/USD goes below $2,300, it is expected to continue dropping and may even reach March’s $2,222 value.

If the price of gold keeps rising, jewelry makers such as GEMXX Corp. (OTC: GEMZ) will have a bigger advantage over their competitors because of their involvement in the entire value chain from gold mining to jewelry making.

NOTE TO INVESTORS: The latest news and updates relating to GEMXX Corp. (OTC: GEMZ) are available in the company’s newsroom at https://ibn.fm/GEMZ

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