Gold futures marked a fourth straight session climb on Friday, with prices posting their best week since April, after a batch of encouraging U.S. inflation data helped drag the dollar to its lowest level in more than a year.
Price action
-
Gold futures for August delivery
GC00,
-0.26% GCQ23,
-0.26%
added 60 cents, or less than 0.1%, to settle at $1,964.40 per ounce on Comex. Prices for the most-active contract ended about 1.7% higher for the week, according to Dow Jones Market Data. That was the strongest weekly rise since the week ended April 6. -
Silver futures for September
SI00,
-0.13% SIU23,
-0.13%
gained 24 cents, or 1%, to $25.19 per ounce, settling 8.2% higher for the week — their biggest weekly rise since the week ended March 17. -
Palladium futures for September
PAU23,
+0.09%
fell by $25.40, or 2%, to $1,266.40 per ounce, with prices up 1.7% for the week, while platinum futures for October
PLV23,
-0.22%
rose 90 cents, or 0.1%, to $984.30 per ounce, tallying a gain of 7.2% for the week. -
September copper
HGU23,
-0.23%
fell by a cent, or 0.2%, to $3.93 per pound. It gained 4% for the week.
Market drivers
Gold prices were slightly higher Friday dealings a day after settling at their highest since mid-June as Wednesday’s June consumer price index inflation report, and Thursday’s June producer price index report, offered the most convincing evidence yet that inflation in the U.S. is starting to ease.
“Lower inflation used to be, in a sane world, bearish for gold,” wrote Brien Lundin, editor of Gold Newsletter. “These days, because falling inflation promotes a more dovish [Federal Reserve], it’s bullish” for asset classes such as gold.
The data showed consumer prices rose by 0.2% last month, the smallest increase since August 2021. wholesale prices rose a meek 0.1% in June and no longer appear to be going up.
The inflation data helped weigh on the U.S. dollar, which added to the tailwinds for gold, since a weaker dollar makes gold, which is priced in dollars, less expensive for buyers using other currencies. The ICE U.S. Dollar Index
DXY,
a gauge of the dollar against its main rivals, rose 0.2% at 99.916 in Friday dealings, but has lost more than 2% this week after falling Thursday to its lowest since April 2022.
“Gold is “taking delight in the fact that its main nemesis, the U.S. dollar, has weakened substantially following the evident slowdown in U.S. inflation.” ”
Gold is “taking delight in the fact that its main nemesis, the U.S. dollar, has weakened substantially following the evident slowdown in U.S. inflation,” said Han Tan, chief market analyst at Exinity Group.
The “zero-yielding precious metal is clearly basking in hopes that the [Federal Reserve] rate hike due later this month might be the final move of a series that began in March 2022,” he told MarketWatch.
Should the Fed all but confirm that a July interest rate hike would be its last in this cycle, that may lift spot gold back closer to the psychologically-important $2,000 mark by month’s end,” said Tan.
Still, “if the rhetoric out of the late-July FOMC meeting dashes hopes that peak rates is close at hand, that may prompt gold to unwind some of its recent gains, unless markets still harbour enough willpower in the interim to continue fighting the Fed,” he said.
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