14/06/2024: This Week in Gold with Market Updates:
Price Action:
Gold Price:
Gold opened the week trading at $2,294 per ounce after closing the previous week 1.43% lower. Price traded within a $53 range for the week, with much of the move to the upside being attributed to Jerome Powell, and the FED.
On Monday, price opened at $2,294 per ounce and gradually climbed throughout the day. There was minimal fluctuation in price, with many investors anticipating economic data throughout the week. Gold closed the day $17 higher, at $2,311 per ounce.
On Tuesday, gold continued the steady trend to the upside, with price moving another $6 higher. Gold closed the day at $2,317 per ounce. Similarly to Monday, investors were waiting for the release of important economic data and FED speeches before making moves.
On Wednesday, the first important economic news drop of the week came and it pushed gold to the upside. Gold hit an intra-day weekly high of $2,342 per ounce in response to U.S. CPI data coming in lower than expected. Conversely, the DXY fell by around 0.5%, further contributing to gold’s move higher. Treasury Yields were also seen to decline in response to this news. Gold consolidated for a few hours, before moving lower and closing the day at only $8 higher from the open.
On Thursday, the FED’s future outlook on interest rates caused gold to continue the downward trend it began on Wednesday evening. Gold fell a total of 0.9% to close the day at $2,304 per ounce. A rising DXY allowed gold to move further to the downside, and contributed to the decline.
On Friday, gold followed a strong bullish trend throughout the day with price consistently moving higher from early morning to mid-afternoon. From then on, the bullish run slowed, losing momentum and price began to consolidate. At the time of writing, gold is trading at $2,326 per ounce and it is currently on track to close the week 1.4% higher.
Silver Price:
Silver opened the week trading at $29.18 per ounce, after closing the previous week 4.04% lower.
Silver traded within a $1.59 range throughout the week. Price hit a weekly high of $30.256 per ounce on Wednesday after U.S. CPI data, and hit a weekly low of $28.658 per ounce the following day after the FED claimed it may only cut rates once this year.
At the time of writing, silver is trading at $29.14 per ounce, and it is on track to close the week -0.1% lower.
Market Updates:
10/06/2024: U.K. GDP (M-o-M), U.S. Core CPI, FOMC Interest Rate Decision:
- U.K. GDP (M-o-M):
On Wednesday, the U.K. GDP data for the month came in at 0%, in line with forecasts and down from the previous month’s figure of 0.4%. This indicates a stagnation in economic growth. Weak economic performance in the U.K. could lead to expectations of dovish monetary policy from the Bank of England, which might support gold and silver prices as investors seek safe-haven assets amid economic uncertainty.
- U.S. Core CPI:
Also on Wednesday, the U.S. Core CPI (excluding food and energy prices) came in at 0.2% month-on-month, lower than the expected 0.3% and the previous month’s 0.3%. On a year-on-year basis, Core CPI was 3.4%, beating the expected 3.5% and down from the previous month’s 3.6%. The headline CPI (including all items) showed a similar cooling trend. Lower-than-expected inflation figures can reduce expectations of holding rates steady and increase expectations of rate cuts. This supports gold and silver as lower rates decrease the opportunity cost of holding non-yielding assets.
- FOMC Interest Rate Decision
The FOMC kept interest rates unchanged at 5.5% during its meeting on Wednesday. Last week, the ECB lowered rates, indicating a more accommodative stance. If the FED hints at future rate cuts, it could be supportive for gold and silver prices as lower interest rates tend to weaken the dollar and reduce the opportunity cost of holding precious metals.
11/06/2024: U.S. Core PPI and Initial Jobless Claims
- U.S. Core PPI:
On Thursday, the U.S. Core Producer Price Index (PPI) came in at 0% month-on-month, below the expected 0.3% and down from the previous month’s 0.5%. On a year-on-year basis, Core PPI was 2.3%, in line with expectations but lower than the previous month’s 2.4%. The headline PPI (including food and energy prices) was -0.2% month-on-month, lower than the expected 0.1% and a significant drop from the previous month’s 0.5%. These lower PPI figures suggest decreasing inflationary pressures, which could lead to expectations of a more dovish monetary policy stance from the FED, potentially boosting gold and silver prices.
- U.S. Initial Jobless Claims:
The initial jobless claims for the week came in at 242,000, higher than the forecasted 222,000 and the previous week’s 229,000. Higher-than-expected jobless claims indicate some softening in the labor market, which can increase economic uncertainty and support demand for gold and silver as safe-haven assets.
