MTS Help Center

Bullion for immediate delivery traded at $1,214.63 an ounce at 12:59 p.m. in Singapore from $1,215.32 on Tuesday, when the metal rose 0.9 percent, according to Bloomberg generic pricing. The metal lost 6.1 percent in May, the biggest monthly drop since November.

Gold’s dismal performance last month trimmed the year’s rally to 15 percent with investors parsing data and comments from Fed leaders to gauge the likelihood of tighter policy. The odds of a rate increase in June or July climbed along with the dollar in May, hurting bullion which doesn’t pay interest. The Fed’s Beige Book, a survey of economic conditions is due later Wednesday, followed by non-farm payrolls on Friday. Fed Chair Janet Yellen is due to speak in Philadelphia on June 6.

“Most investors will be watching Yellen’s speech closely next week to find out if the Fed will raise interest rates,” Brian Lan, managing director of Singapore-based GoldSilver Central Pte, said by e-mail. “Till then, we don’t expect much movement in the prices unless the upcoming data release on Wednesday and Friday will have some surprises.”

Tuesday’s rise followed figures that showed U.S. consumer confidence unexpectedly fell while manufacturing gauges weakened.

“Gold prices lifted for the first time in 10 days as the market chose to focus on the weaker side of U.S. data,” Australia & New Zealand Banking Group Ltd. said in a report, noting that U.S. manufacturing indicators disappointed.

The fed-funds futures market showed on Tuesday that the odds of a rate increase at the Fed’s June meeting were 23%, according to data from CME Group, down from 34% earlier in May.

The Fed hasn’t raised rates unless the market assigned at least 60% odds to such a move via the near-term fed-funds futures contracts the day before a rate increase, according to Mark Cabana, U.S. rates strategist at Bank of America Merrill Lynch in New York. Mr. Cabana used fed-funds futures data back to 1994.

Gokul Laroia , managing director and co-CEO Asia Pacific, Morgan Stanley said “Our view is that there is a possibility of US central bank increasing interest rates by one or two times this year. About four weeks ago, the likelihood of US Fed increasing rates was less than 5%, but now it's about 35%. US Fed has done a good job of managing market expectations, S&P 500 is trading close to its all-time high. The markets are taking into account more resilient US economy which will support global growth. Markets are also assuming one or two interest rate hike this year.”

Reference: Bloomberg, The Wall Street Journal, The Economic Times