Gold rose early Friday, extending the yellow metal’s gain of more than 5% in the first four days of the week. It slipped Thursday but settled above $1,400 an ounce for the fifth consecutive session.
This morning’s U.S. economic news had little impact on the yellow metal. The Dept. of Commerce reported consumer spending rose slightly in May by .4%, while prices rose slightly. These likely indicators of a slowing economy could give the Fed ammunition to cut rates at the end of July.
Of course, the speculation about a Fed rate cut and geopolitical tensions with Iran have bolstered gold in recent weeks. The CME FedWatch Tool kept the odds of a rate cut on July 31 at 100% as of this morning. It was 86.3% before last week’s policy decision.
Yesterday’s reading on the health of the U.S. economy, showed stagnant growth in the first three months of 2019 with the GDP growth left at 3.1% by revised government figures, as stronger business investment offset a weaker increase in consumer spending.
Meanwhile, all markets are holding their breath as the world awaits news out of Osaka.
The Group of 20 summit starts today in Osaka, Japan, and U.S. President Donald Trump and Chinese President Xi Jingping are set to meet for about 90 minutes on the sidelines Saturday (10:30 pm Eastern time today). A trade agreement between the two countries would likely weigh on gold, The Wall Street Journal reported. The standoff between the two superpowers has made gold more attractive as a safe-haven asset in the past few months and caused the dollar to plummet.
The Chinese president condemned protectionism and “bullying practices” in a meeting with African leaders ahead of the summit, Bloomberg reported early Friday, citing Dai Bing, the foreign ministry’s director general for African affairs.
Trump is also scheduled to meet with Russian President Vladimir Putin and German Chancellor Angela Merkel at the summit.
Gold futures for August delivery slipped 0.2% Thursday to settle at $1,412 an ounce on Comex. Currently, gold is up slight in the August contract to $1,414.
Silver futures fell 0.6% Thursday to $15.21 an ounce on Comex and currently the September contract is up to $15.325. For the first four days of the week, the metal was up 2.7%. Silver will likely face resistance near $15.60 and move slightly lower before testing the upside again, according to technical analysis by Chris Vermeulen at FX Empire.
Spot platinum, which is sensitive to the growth of the Chinese automotive industry, decreased 0.3% on Thursday. Platinum is trading near 15-year lows even as other precious metals climb because of strong mining production out of South Africa and declining automotive demand, Seeking Alpha reported. This morning, spot platinum is up .85% to $820.87
Spot palladium was up 1.9% Thursday heading into the end of the week solidly in the $1,540 to $1,550 range. This morning, it has slipped down 1.67% to $1,525.88.
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