Gold Recoups from 2-week Low as Traders Eye US Inflation Data

A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024.  REUTERS/Alexander Manzyuk
A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk
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Gold Recoups from 2-week Low as Traders Eye US Inflation Data

A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024.  REUTERS/Alexander Manzyuk
A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk

Gold prices drifted higher on Monday from a two-week low hit in the previous session as traders gauged fading hopes of US interest rate cuts ahead of a key inflation report due later this week.
Spot gold was up 0.4% at $2,342.73 per ounce, as of 0543 GMT, having touched its lowest since May 9 at $2,325.19 on Friday. US gold futures also climbed 0.4% to $2,343.60, Reuters reported.
Bullion hit a record high of $2,449.89 earlier last week, but has shed more than $100 since then.
"I suspect gold can manage a small bounce from current levels before retesting the $2,280-$2,300 zone, which could see losses extended if US data continues to outperform," said City Index senior analyst Matt Simpson.
The core personal consumption expenditures price index (PCE), the preferred inflation measure for the US Federal Reserve, is due on Friday.
Bullion is known as an inflation hedge, but higher rates increase the opportunity cost of holding non-yielding gold.
"With bullish fingers being burned at the highs and forcing some to liquidate and others to switch to the bear-camp, I doubt we'll see a new high soon with the Fed maintaining their 'higher-for-longer' narrative with interest rates," City Index's Simpson said.
Minutes from the Federal Reserve's meeting published last week showed the central bank's path to 2% inflation could take longer than expected.
Traders' bets indicated rising skepticism that the Fed will lower rates more than once in 2024, currently pricing in about a 62% chance of a rate cut by November according to the CME FedWatch Tool.
According to Reuters technical analyst Wang Tao, spot gold may test resistance at $2,352 per ounce, a break above could open the way towards $2,363.
Gold demand in India slightly improved last week after prices corrected from a record high, but retail purchases remained lower than normal, prompting dealers to widen discounts.
Spot silver rose 1.6% to $30.83, platinum climbed 1.4% to $1,040.25 and palladium gained 1.4% to $976.72.



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.