© Reuters.
by Ambar Warrick
Investing.com – Updated at 14:02 GMT
Purchasing managers’ indices for the US economy were released, and they were all positive, indicating that the US economy is in an economic expansion zone, which gives the Fed more room to move and raise rates freely, according to members’ statements this morning.
After the readings, prices recorded $1,973 an ounce in spot transactions, and $1,984 in forward transactions.
Gold prices moved strongly on Friday, but held steady at key levels as a series of weak economic readings stoked concerns about slowing growth and fueled safe-haven demand for the yellow metal.
Bank of America (NYSE:) said gold saw $70 billion exits during the week, with $4.6 billion flowing into bonds (gold’s biggest competitor), and $2.6 billion exiting the stock market.
While gold prices have been pressured by some strength this week, weaker-than-expected manufacturing and employment readings weighed on the dollar in recent sessions, while also fueling fears of a potential recession this year.
With the statements of the Federal Reserve and other central banks, gold hit a wave of declines today, with a price drop at 10:30 GMT to $ 1,988 an ounce, with a decrease of $ 1,999 an ounce.
Data released on Thursday showed that April fell more than expected, while the weekly rose more than expected. Home sales in the US also slowed dramatically in March.
The readings heightened fears of slowing economic growth in the world’s largest economy amid rising inflation and interest rates. Higher-than-expected inflation readings from the UK and the region also raised expectations of further rate hikes from their respective central banks, pointing to increasing economic pressure in the coming months.
While the prospect of higher interest rates bodes weak for non-yielding assets like gold, concerns about the ensuing economic slowdown have kept the yellow metal relatively healthy.
Gold had a stellar run through March as the collapse of several US banks boosted the safe-haven demand significantly. While regulatory intervention has quashed fears of a larger banking collapse, markets remain wary of further economic scarring.
Expectations of a definitive halt in rising US interest rates have also seen gold largely overtake the dollar as the safe-haven favorite, even though several Federal Reserve officials have called for more rate hikes to curb soaring inflation.
Among the industrial metals, copper prices have been taking losses this week as signs of slowing manufacturing activity around the world weighed heavily on the red metal’s appeal.
It settled around $4.0185 a pound, down 2.1% this week.
Gold is awaiting the PMI data from the US today, which may affect its path.
The most important levels of gold in instant transactions:
