Posted 31st May 2023

Gold Price News: Gold Set For Monthly Drop on Improving Market Confidence

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Gold is set for its first monthly decline in three months with today’s slight recovery to around $1,960 an ounce still leaving it below where it started May. 

After surging to near-record highs at the start of the month, May has ended with optimism slowly creeping back into markets that the worst of inflation is behind the world’s economies and increasing confidence that the US will indeed reach agreement on its debt ceiling and avoid a default.

As such with investors and traders’ attitude to risk increasing, gold is struggling to make headway but the fact that it is still able to trade at such elevated levels, with $1,960 a level it has only traded at a handful of times in its long history, shows that there is still plenty of caution among market participants.

Assuming the US does ratify its new debt ceiling agreement, then June looks set to be a more challenging month for gold with more bearish factors than bullish ones. Attention will quickly switch to the US jobs data and then the inflation data that comes out before the Federal Reserve meets to decide its June interest rate decision in the middle of the month. While it seemed certain that the Fed would pause on rate hikes a few weeks ago, that certainty is weakening a little and the prospect of a further increase in benchmark rates could send gold back down to $1,900 an ounce.


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