Gold remained resilient on Thursday, maintaining its position close to a one-month peak, as anticipated U.S. inflation figures and weaker job data bolstered the prevailing consensus that the Federal Reserve will maintain its current stance on interest rates throughout the year.
At 1:51 p.m. EDT (1751 GMT), spot gold experienced a marginal dip of 0.1%, reaching $1,940.23 per ounce. This was in proximity to its recent high on August 2, at $1,948.79, which was reached just the previous day.
Meanwhile, U.S. gold futures concluded the session with a 0.4% decline, settling at $1,965.90.
The U.S. inflation data, gauged by the personal consumption expenditures (PCE) price index, exhibited a modest increase of 0.2% for the past month, aligning with the growth witnessed in June. Over the span of twelve months through July, the PCE price index demonstrated a 3.3% rise, following a 3.0% advancement in June.
In parallel, U.S. consumer spending, a critical factor accounting for over two-thirds of the nation’s economic activity, displayed a notable acceleration in the month of July.
Weekly initial jobless claims recorded a decline of 4,000, amounting to 228,000. This metric stands in comparison to a four-week average of 237,500.
Bob Haberkorn, senior market strategist at RJO Futures, assessed the data as moderately favorable, stating that while the figures were not overwhelmingly negative, they did not signal robust growth either. Haberkorn suggested that these circumstances could position the U.S. Federal Reserve to curtail the trajectory of interest rate hikes earlier than initially projected.
The gold market presently adopts a cautious stance, awaiting developments. A potential decline in bond yields could potentially drive an upswing in gold’s value, as highlighted by Haberkorn.
Following the release of the economic data, both U.S. Treasury yields and the dollar index experienced marginal increases. Though they briefly trimmed their gains, this dynamic rendered non-yielding gold less attractive.
Market expectations on the Federal Reserve maintaining rates without alteration for September hovered at 88.5%. Meanwhile, projections of a pause in November stood at 51%, as indicated by the CME Group’s FedWatch tool.
In parallel to gold’s performance, silver underwent a minor decline of 0.7% to reach $24.48 per ounce, having achieved a one-month high on the preceding day. Platinum similarly witnessed a decline of 0.8%, reaching $966.05, yet remained on track for its second consecutive monthly gain.
Impala Platinum’s Chief Executive, Nico Muller, emphasized that a rapid decrease in palladium and rhodium prices had exerted pressure on profits. Muller conveyed that while there were no immediate threats of mine closures, the management would evaluate each mine’s capacity to generate profit.
As for palladium, it experienced a modest fall of 0.4% to reach $1,217.33. The metal is projected to witness a 5% decline for the month, amounting to a cumulative 31% decrease throughout the year.
