In anticipation that the Federal Reserve will not raise its benchmark interest rate at the next FOMC meeting that ends on Wednesday, June 14 market participants have moved gold prices higher for the last two weeks.

New jobless claims over the last seven days ending on June 3 increased by 28,000 individuals. This takes the jobless rate in the United States to new almost a two-year high with 261,000 Americans now jobless. In October 2022 jobless claims were just under 200,000 and peaked at 220,000 in the middle of November 2022.

To avoid a financial crisis in the United States the government passed legislation to leave the U.S. debt ceiling uncapped for two years avoiding a financial government default. However, the fallout from the U.S.

The Federal Reserve will begin its Federal Open Market Committee (FOMC) meeting exactly one week from today on Tuesday, June 13th. On the morning of the 13th, the government will release its latest report on inflationary pressures vis-à-vis the CPI (Consumer Price Index).

Market sentiment regarding the next step of the Federal Reserve has been changing as statements by Federal Reserve officials and reports are released. The sentiment had been predominantly in favor of a pause in interest rate hikes.

Gold prices fell sharply today after the BLS (Bureau of Labor Statistics) revealed that 339,000 new nonfarm payroll jobs were added last month, well above Wall Street estimates that predicted an increase in May of 190,000 new jobs. The report also showed that the unemployment rate rose from a 53-year low of 3.4% in April to 3.7% last month.

Gold futures basis the most active August 2023 Comex contract is currently trading up $13.40 or 0.67% and fixed at $1995.50. The less likely risk of a default by the largest creditor in the world has added to the bullish sentiment in gold. The bipartisan legislation went to Congress yesterday where it passed in a vote of 314 to 117.

Conflicting market forces have had a strong impact on gold pricing, inflation, and higher rates. This is because higher inflation creates bullish market sentiment in gold, while higher interest rates create bearish market sentiment. As of 5:11 PM EDT, gold futures basis most active August 2023 contract is fixed at $1981 up $3.90 or 0.20% on the day.

Over the three-day holiday weekend, President Biden and House Speaker McCarthy reached a deal to raise the debt limit which hit $31.4 trillion In January. The 99-page bill headed over to the House Rules Committee this morning, where the committee will vote to send it over for a full house vote expected on Wednesday.

The BLS (Bureau of Labor Statistics) released the latest data on inflation, the personal consumption expenditures price index (PCE price index) for April 2023 today. Inflation rose by 0.4% last month, an increase of 4.7% compared to a year ago.