Gold Prices Dip on Hawkish Fed Minutes

A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)
A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)
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Gold Prices Dip on Hawkish Fed Minutes

A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)
A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)

Gold prices fell for a third straight session on Thursday after minutes from the most recent Federal Reserve meeting indicated that some officials were inclined to raise interest rates.
Spot gold fell 0.6% at $2,365.49 per ounce, as of 0638 GMT. Bullion hit a record high of $2,449.89 on Monday, Reuters reported.
U.S. gold futures were down 1.1% at $2,367.60.
While the policy response for now would "involve maintaining" the US central bank's benchmark policy rate at its current level, the minutes released on Wednesday also reflected discussions of possible further hikes.
"Gold did take a bruising after the Fed minutes reminded investors that interest rate cuts are far from imminent," said Tim Waterer, chief market analyst at KCM Trade.
Bullion is known as an inflation hedge, but higher rates increase the opportunity cost of holding non-yielding gold.
"There is a chance gold could drift back to support levels around the $2,355 region if the dollar keeps the upward momentum going," Waterer said, adding that the medium to longer-term outlook still looks constructive for gold, but that is very much predicated on the next rate move being lower and not higher from the Fed.
Traders' bets signaled growing doubts that the Fed will cut rates more than once in 2024, currently pricing in a 72% chance of a rate cut by November.
India's gold imports in 2024 could fall by nearly a fifth from the previous year as record high prices spur retail consumers to exchange old jewelry for new items, the head of an industry body told Reuters.
"While physical gold demand has been holding up well since 2021, a sharp price rise is likely to temper discretionary buying in 2024. For jewelry demand, fewer days deemed in Indian and China to be auspicious for weddings could be a headwind," ANZ said in a note.
Spot silver fell 0.9% to $30.48, platinum lost 0.6% to $1,028.55 and palladium dropped 1.1% to $988.62.



Lebanon Tourism Season Revives Economic Outlook

People are seen at the arrival lounge at Beirut International Airport, Lebanon. (Asharq Al-Awsat)
People are seen at the arrival lounge at Beirut International Airport, Lebanon. (Asharq Al-Awsat)
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Lebanon Tourism Season Revives Economic Outlook

People are seen at the arrival lounge at Beirut International Airport, Lebanon. (Asharq Al-Awsat)
People are seen at the arrival lounge at Beirut International Airport, Lebanon. (Asharq Al-Awsat)

The surge in visitors to Lebanon during Eid al-Adha and high demand for summer concert bookings are boosting hopes for a revival in tourism.

This sector is crucial for reigniting positive economic growth after about nine months of challenging conditions due to the Gaza war and subsequent border clashes between Hezbollah and Israel in southern Lebanon.

Contrary to earlier fears this month of possible Israeli strikes inside Lebanon, Ali Hamieh, caretaker Minister of Public Works and Transport, reported a daily average of 14,000 arrivals at Beirut’s Rafic Hariri International Airport, with numbers on the rise.

Jean Abboud, President of the Association of Travel and Tourism Agents, confirmed that despite initial concerns, booking rates have bounced back to 90-95% after Israeli threats of a mid-month strike. Most arrivals are Lebanese expatriates and foreign workers.

Before the summer season’s anticipated surge, Lebanon saw a 5.37% decrease in arrivals, with air traffic down by 9.34% and passenger numbers at Beirut International Airport dropping by 6.84% in the first five months of this year, totaling 2.29 million travelers compared to 2.46 million last year.

These declines were linked to the border clashes.

Lebanon’s tourism sector, generating over $5 billion annually in recent years, ranks as the country’s second most vital revenue stream after expatriate remittances, which officially approach $7 billion.

Together, they contribute more than half of Lebanon’s national income, which has dropped sharply from about $55 billion to under $22 billion due to the ongoing financial and currency crises that erupted five years ago.

Despite significant losses during peak tourism seasons like Christmas, Easter, and Eid al-Fitr, a report by Bank Audi indicated that Lebanon’s tourism revenues lost over $1 billion in the first six months of the Gaza conflict, driven by a 24% drop in tourist arrivals.

On average, tourists spend around $3,000 during their stay in Lebanon.