Bullion modestly up in Q3 2023 first sessions

Gold prices eked out a marginal gain today, July 3, as markets assessed the recently-released weak US economic data.

Total gold transactions slumped in the second quarter of this year. However, the precious metal modestly rose during today's trading after the US dollar index depreciated after recent data questioned the Federal Reserve's commitment to tightening monetary policy during the coming period.

The Institute for Supply Management (ISM) factory purchasing managers' index (PMI) declined by 46 points in June for the eighth straight month, compared to 46.9 points in May, against expectations for 47.2 points.

Further, the final reading of the S&P Global Manufacturing PMI showed that the seasonally adjusted index fell to 46.3 in June from 48.4 in May, in line with the preliminary reading. This, however, reflected the deteriorating manufacturing performance in seven of the past eight months.

Financial markets are pricing in an about 89% chance that the US central bank will lift interest rates by 25 basis points during the rate-setting committee’s meeting later this month. There is also a 70% probability that rates will remain fixed at the 5.25%-5.50% range at the September meeting, according to the CME FedWatch Tool.

On July 5, investors are awaiting the issuance of minutes of the Fed’s June meeting, during which interest rates were kept unchanged at 5% and 5.25%, in the lookout for more clues about the course of monetary policy in the forthcoming period.

In terms of trading, gold prices for August delivery advanced slightly by 10 cents to close at $1,929.5 an ounce.

In addition, the US dollar index, which gauges the greenback's strength against a basket of six currencies, grew by approximately 0.10% to reach 102.99 points at 08:53 pm Makkah time, after touching 103.27 points in early trading.