Gold heads for a weekly increase, despite some early Friday profit-taking, as haven demand grows triggered by increasing geopolitical tensions and the risks associated with the upcoming U.S. presidential election.
U.S. Secretary of State Antony Blinken’s latest visit to the Middle didn’t end with a return to the negotiating table by Israel, Hezbollah or Hamas, and an Israeli strike killed 17 people Thursday at a school in Gaza. Separately, the U.S. presidential race appeared too close to call in the latest polling data. The election is less than two weeks away.
Investors will look to the release Friday of U.S. durable goods data and the University of Michigan’s consumer sentiment index for further direction.
Front-month gold futures rose 0.7% Thursday to settle at $2,748.90 an ounce on Comex, and the most-active December contract increased 0.7% in the first four days of the week. Bullion is up 3.4% so far this month after gaining 5.2% in September and advancing 2.2% in August. The metal rose 13% in 2023. The December contract is currently down $10.10 (-0.37%) an ounce to $2738.80 and the DG spot price is $2730.10.
Uncertainty, which is typically bullish for gold, make send the yellow metal above the $2,800-an-ounce barrier in the next few weeks, with potential to reach $3,000, Reuters reported. Gold is a traditional hedge against geopolitical risk.
Gold has also been rising ahead of an anticipated Federal Reserve interest rate cut in November. The central bank cut interest rates by 50 basis points last month to 4.75% to 5.00%. It had kept them at 5.25% to 5.50% for a year after raising them by 5.25 percentage points since March 2022 to rein in inflation.
The Fed’s favorite inflation measure, the personal consumption expenditures price index, comes out Oct. 31 with September data. It will be closely followed by the U.S. monthly employment report for October on Nov. 1. The Fed has said it closely watches inflation and labor market data when setting rates. U.S. weekly initial jobless claims for last week fell to the lowest level in a month in data released Thursday.
Most investors tracked by the CME FedWatch Tool expect the Fed to cut rates again in November, with 97.4% anticipating a 25 basis point reduction. The rest are betting on the Fed holding rates steady. The central bank has two scheduled policy meetings left this year. Most investors tracked by the tool are expecting rates to end the year at 4.25% to 4.50%.
Front-month silver futures slipped 0.1% Thursday to $33.80 an ounce on Comex, and the December contract is up 1.7% this week. Silver is up 7.4% in October after rallying 7.9% in September and gaining 0.7% in August. It ticked up 0.2% in 2023. The December contract is currently down $0.175 (-0.52%) an ounce to $33.620 and the DG spot price is $33.55.
Spot palladium gained 9.6% Thursday to $1,170.50 an ounce and is up 7.4% in the first four days of the week. Palladium is up 16% in October after gaining 3.2% in September and rising 3.2% in August. Palladium plummeted 38% last year. Current DG spot price is up $24.60 an ounce to $1197.50
Spot platinum advanced 0.6% Thursday to $1,030.00 an ounce and is up 1.2% so far this week. Platinum is up 4.7% in October after increasing 5.6% last month and sliding 5.2% in August. Platinum dropped 6.8% in 2023. The DG spot price is currently down $4.00 an ounce to $1026.60.
Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or a recommendation regarding any particular security, commodity, or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities, or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand, and accept this disclaimer.