In the fluctuating financial landscape, gold’s status as a safe-haven asset has been challenged, observes Julia Khandoshko, CEO of the European brokerage firm Mind Money. The precious metal is experiencing a downturn as market analysts scrutinize the economic indicators emerging from the United States. With inflation figures and Federal Reserve communications suggesting a hold on interest rate reductions in June, the market’s anticipation has shifted.
The Federal Reserve’s recent communications convey a lack of immediate plans to lower interest rates, diminishing the allure of gold, which does not yield interest. Market sentiment now leans towards a potential rate decrease by the Fed in September, rather than June.
Investors are advised to monitor the upcoming U.S. Gross Domestic Product (GDP) announcement this Thursday and the Personal Consumption Expenditures (PCE) data release on Friday. These economic indicators will provide further insights into the nation’s fiscal health and the possible schedule for interest rate adjustments.
Khandoshko also notes that the current market correction in gold prices is partly due to its overbought status.
In the commodities market, spot silver has seen a 0.6% decline to $27.04. The autocatalyst metals, platinum and palladium, have also experienced decreases, with platinum falling 1.4% to $904.60, and palladium receding 1.2% to $996.43.
In a forward-looking statement, the International Energy Agency forecasts that electric vehicles will constitute over 20% of global car sales by 2024, marking a significant shift in the automotive industry.
