Lower After US Data Pushes Yields Higher

Gold is slightly higher (+0.1%) in Asia-Pac trading after closing at a three-month low as a flurry of data showed a surprisingly strong US economy, giving the Federal Reserve more scope to keep raising rates.

• In May, durable goods orders experienced a 1.7% m/m increase, surpassing expectations of -0.9%. Additionally, new home sales saw a substantial 12.2% m/m rise in May, contrary to the expected -1.2% decline. Furthermore, the US Conference Board Consumer Confidence Index exceeded expectations and reached its highest level since January 2022.
• Bullion faced downward pressure as tsy yields increased, which is a disadvantage for gold due to its lack of interest-bearing characteristics.
• The prospect of further tightening measures in the US and other countries is adding downward pressure on the precious metal, which has declined approximately 7% since its peak in early May.
• However, there is still some concern that a hawkish stance by the Federal Reserve could potentially push the world's largest economy into a recession, providing some support for gold.