Gold prices surged late in the North American session on Friday, gaining over 1% despite persistently high US Treasury bond yields. The upward movement was driven by growing pessimism among Americans about the economy, as indicated by a University of Michigan (UoM) survey showing a plunge in Consumer Sentiment to its lowest level in six months.
The XAU/USD pair traded at $2,369 after rebounding from daily lows of $2,343. Market sentiment was heavily influenced by Friday’s data on consumer sentiment and recent weak labor market figures from early May, painting a somber outlook for the US economy. Although concerns of a significant economic slowdown remain subdued, investors seeking safe havens propelled both gold and the US Dollar higher.
Federal Reserve officials made significant statements throughout the day. Atlanta Fed President Raphael Bostic maintained a hawkish stance, suggesting that the Fed is on track for only one rate cut in 2024. Fed Governor Michelle Bowman echoed this sentiment by advocating for steady policy and expressing no need for rate cuts this year. Dallas Fed’s Lorie Logan dismissed the notion of interest rate cuts altogether.
Minneapolis Fed President Neel Kashkari adopted a cautious “wait and see” approach toward future monetary policy decisions.
Looking ahead, next week’s US economic calendar will feature key releases including inflation figures, retail sales data, building permits, and additional speeches from Federal Reserve officials. These events will likely further shape market expectations and influence the trajectory of gold prices amidst ongoing economic uncertainties.
