Gold Prices Rise as Dollar Falls on Economic Data and Fed Evaluation

Gold prices rose at the settlement of trading today, following a decline and with the evaluation of the monetary policy path by the Federal Reserve.

The dollar fell after the release of economic data that increased expectations that the Federal Reserve would skip raising interest rates during the next meeting, as fears of an economic recession were renewed with manufacturing activity contracting for the seventh month in a row in May, according to the “ISM” Manufacturing Purchasing Managers’ Index.

Initial jobless claims rose by 2,000 to 232,000 during the week ending May 27, the highest level in three weeks.

Philadelphia Federal Reserve Chairman Patrick Harker said the central bank may not need to raise interest rates further as it is nearing the point at which monetary policy rates can be stabilized and allowed to work to rein in inflation.

Financial markets suggest that the Federal Reserve will fix the current range of interest rates during the next monetary policy meeting in less than two weeks, as the Fed Watch tool showed that this possibility rose to 75%.

Upon settlement, August delivery rose 0.7%, or $13.4, to $1,995.5 an ounce.