26/01/2024: This Week in Gold with Market Updates
Price Action:
Gold Price:
Gold opened the week trading at $2,029 an ounce after closing the week lower for the 3rd time this year. Price seemed to make little movement throughout the week, starting off slow on Monday and Tuesday. There was little economic data to influence movement this week.
On Monday, price traded within a 0.7% range, with an intra-day high and low of $2,032 and $2,017, respectively. Price fell $7 an ounce to close the day 0.3% lower at $2,022. Trimmed U.S. rate cut bets contributed to this decline, along with a rise in equity markets. A climb in stocks dampens interest in safe-haven assets.
Tuesday followed a similar path to the previous session, with gold consolidating for the duration of the day. Price recovered the loss that it made on Monday, climbing $7 to close at $2,029 an ounce.
On Wednesday, price fell after the release of strong U.S. economic data. U.S. business activity was seen to increase in January, which indicates a strengthening economy. This may have led investors to rethink interest rate expectations. In a strong economy, Central Bank’s are likely to keep rates unchanged, or even increase them. This is because the primary goal of a Central Bank is to maintain price stability and support sustainable economic growth. Losses on Wednesday were limited due to a weakened dollar. Gold fell to $2,014 an ounce, which was a 0.7% fall from the $2,029 open.
Thursday saw gold regain some of the losses experienced on Wednesday. Price moved higher after the release of U.S. GDP data. The economy was shown to expand more than expected on Thursday, while the data also showed inflation to slow. This new data led to a fall in Treasury yields, which was behind the slight uptick in gold for the day. After opening at $2,014 an ounce, price rose $7, or 0.3%, to close the day at $2,021.
More consolidation was experienced for gold on Friday, as market participants anticipated PCE data, a key inflation metric. Once the data was released, price continued to consolidate. There was not much deviation from what was expected, so markets did not make any major moves in either direction. At the time of writing, gold is trading at $2,019 an ounce. Price is currently down 0.5% for the week.
Silver Price:
Silver opened the week trading at $22.62 an ounce. Silver started the week poorly, with price falling 2.3% on Monday to close the session at $22.09. However, a resurgence was experienced on Tuesday, with a clear uptrend being set in place for the days following.
On Tuesday, price embarked on a move to the upside, rising $0.32 an ounce by the early hours of the morning. Price seemed to counteract the impact that firm U.S. Treasury yields and a strong dollar would usually have. From a technical perspective, price was seen to rebound from the $22 support level.
Price continued to climb on Wednesday, rising another $0.23 an ounce to close the session at $22.67.
On Thursday, another move to the upside was fueled by the release of U.S. GDP data, with silver moving similarly to gold. Price closed the session at $22.91 an ounce.
At the time of writing, silver is trading at $22.79 an ounce.
