Gold prices plummeted on Wednesday, pressured by rising US Treasury yields and a stronger US Dollar following hawkish remarks from a Federal Reserve (Fed) official. The XAU/USD declined by approximately 0.87%, trading at $2,339 at the time of writing.
Wall Street experienced losses, while US yields, spanning from mid- to long-term, rose between four and six basis points. The economic calendar was light on Wednesday, leaving traders to digest comments from Minnesota Fed President Neel Kashkari, who reiterated the possibility of further rate hikes. He also mentioned that if rate cuts were to occur, they would likely be implemented twice toward the end of 2024.
In other economic news, the US Conference Board (CB) reported improved consumer confidence for May. However, concerns about a potential recession in the next 12 to 18 months have surfaced among Americans, according to Dana Paterson, The Conference Board’s Chief Economist.
Looking ahead, traders are gearing up for the release of April’s Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge. The core PCE is expected to show a 2.8% year-over-year increase, while the headline PCE is projected to rise by 0.3% month-over-month. These inflation data points will be closely watched as they could influence the Fed’s future monetary policy decisions.
