Gold (XAU/USD) climbed over 1% on Friday, pushing prices to $2,658 and positioning the yellow metal for a modest 0.20% weekly gain. The rally comes on the back of mixed U.S. economic data, which kept inflation concerns in check and limited the U.S. Dollar’s advance.
The U.S. Bureau of Labor Statistics (BLS) reported that producer prices for September were largely in line with expectations, indicating a downward trend in inflation, though still above forecasts. Meanwhile, the University of Michigan’s (UoM) Consumer Sentiment Index for October revealed a decline in American confidence, largely due to rising living costs.
Despite this, the U.S. Dollar remained firm, but gold prices edged higher as investors sought safety amid economic uncertainty. This occurred even as U.S. Treasury bond yields, particularly the 10-year Treasury note, rose slightly to 4.081%.
Chicago Fed President Austan Goolsbee offered a positive outlook on inflation and the labor market during a Bloomberg interview, stating that while September’s jobs report was solid, there are no signs of economic overheating.
Commenting on the market, Jim Wyckoff, an analyst at Kitco, noted, “The PPI numbers leaned friendly for precious metals bulls and suggest the Fed remains on track for two quarter-point interest rate cuts this year.”
Looking ahead, the U.S. economic calendar remains packed, with speeches from Federal Reserve officials and the release of the New York Fed Empire State Manufacturing Index early next week. Key data such as Retail Sales, Initial Jobless Claims, and housing figures in the latter part of the week will likely influence the Fed’s monetary policy direction.
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