Quick overview

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Gold prices surged on Wednesday, driven by rising global economic uncertainty.

Spot gold jumped 0.6% to $3,370.7 per ounce, while US gold futures increased by 50 basis points to $3,394.90.

 

The US economy is showing slower growth as previously forecasted, enabling the Fed to contemplate additional measures, as indicated in the recent economic data published. The ISM PMI data indicated business activity fell for the first time in almost a year.

The ADP National Employment Change data showed that private sector employment also decelerated significantly in May.
Once again, Trump complained about Chair Powell not lowering borrowing costs earlier. During the week, Fed officials appeared to relax, suggesting they do not seek to transition back to rate cuts, which were initiated in the latter half of the year. The impact of the tariffs is indeterminate but can contribute to increasing inflationary pressures, which are likely to persist.”

Traders will be keen to analyze the US initial jobless claims figure scheduled for May 31 and the non-farm payrolls due on Friday.

China accused the US of breaching the US-China trade agreement as the United States placed additional restrictions on chip technology and stopped the export of important jet engine parts and technology to China.

The world’s largest economy also plans to extend its containment on China’s technology sector with new rules meant to ensnare the subsidiaries of other companies under US restrictions. The United States furthermore plans to cancel visas for students from China affiliated with the Communist Party of China and who have alleged security concerns.