Gold heads towards its lowest level in a month
Gold drops below $1930 ahead of the release of US inflation figures
US bank stocks were able to recover losses from yesterdays sharp drop
The spot price of gold underwent a 0.6% drop, settling at $1925.79 per ounce
Federal Reserve member Michelle Bowman conveyed that the US Federal Reserve may persist with its interest rate hikes to manage inflation
US stock futures rise
On Wednesday, there was a rise in US stock futures as the market aimed to recover from the previous day's losses. Dow Jones futures climbed by 24 points, equivalent to a 0.1% increase.
Meanwhile, European stocks faced a dip due to Moody's revising down its outlook for US banks. This shift heightened risk aversion, leading to a subsequent drop in stock prices. Nonetheless, some analysts believe these declines might be transient, given the consistent demand for stocks.
This situation coincides with the anticipation of forthcoming US inflation data, scheduled for release tomorrow. The data's potential impact on future stock market movements is highly anticipated, with projections of a 3.3% annual increase in consumer prices.
In other news, Wendy's dropped 2% in response to disappointing earnings, following the fast-food chain's announcement of below-expectation Q2 revenues. Conversely, notable banks saw a pre-market uptick on Wednesday, with Bank of America and Citigroup both witnessing a respective rise of 0.2% and 0.3% before the opening bell.
Gold is down for the third consecutive session
Shifting focus to the metals market, gold prices have extended their decline for a third consecutive session. This decrease can be attributed to a waning appetite for gold, influenced by discouraging data from China and cautious anticipation ahead of tomorrow's inflation data release.
The spot price of gold underwent a 0.6% drop, settling at $1925.79 per ounce, marking its lowest point since July 10. Similarly, US gold futures remained down by 0.5%, with a value of $1959.9. The concerns stemming from China's economic deceleration have spurred an elevated demand for the US dollar, contributing to a decreased interest in gold.
Compounding these factors, Federal Reserve member Michelle Bowman conveyed that the US Federal Reserve may persist with its interest rate hikes to manage inflation, at least until the culmination of the current year. This ongoing elevation in US interest rates bears an influence on gold, as it amplifies the opportunity cost associated with holding non-yielding bullion.