Gold higher, but heads for fourth weekly dip

Gold higher, but heads for fourth weekly dip

Gold higher rising from five-week lows early Friday as the dollar and Treasury yields fell from recent highs, but the yellow metal still heads for fourth weekly dip.

The declines in the dollar and bond yields gave gold a boost by making the precious metal more attractive as an alternate investment. But gold remained under pressure from increased speculation that the Federal Reserve isn’t done with its series of interest rate hikes. 

Minutes of the last Fed policy meeting, which were released Wednesday, showed that officials continued to express concern about the pace of inflation and said that more rate hikes could be necessary unless things change. 

Front-month gold futures fell 0.7% Tuesday to settle at $1,915.20 an ounce on Comex, and the December contract lost 1.6% in the first four days of the week. Bullion rose 4.1% in July after losing 2.7% in June and retreating 0.9% in May. The metal gained 5.7% in the first half of the year after falling $2.40 in 2022. The December contract is currently up $6.2 (+0.32%) an ounce to $1921.40 and the DG spot price is $1891.70.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.8% Thursday to 887.50 metric tons, the lowest level since January 2020, Reuters reported.

“With inflation still well above the committee’s longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,” according to the minutes. Fed policymakers meet next in September and have three meetings left this year. 

Still, about 90.5% of investors tracked by the CME FedWatch Tool are betting that the Fed will keep its federal funds rate unchanged in September at 5.25% to 5.50%. Just 9.5% expect it to raise rates another 25 basis points. The central bank has raised rates by 5.25 percentage points since March 2022 in an effort to rein in inflation.

Investors are awaiting comments on the economic outlook from Fed Chairman Jerome Powell on Aug. 25 in Jackson Hole, Wyoming, for further direction. 

December silver futures gained 0.8% Thursday to settle at $23.04 an ounce on Comex. The rolling front month, which moved into December from September this week, was up 1.3% from the end of last week. Silver gained 8.5% in July after dropping 2.4% in June and decreasing 6.5% in May. It retreated 4.2% in the first half of the year after rising 3% in 2022. The December contract is currently up $0.073 (+0.32%) an ounce to $23.115 and the DG spot price is $22.76.

Spot palladium increased 0.4% Thursday to $1,234.00 an ounce and is down 6.8% so far this week. Palladium rose 3.6% in July after falling 9.5% in June and tumbling 9.3% in May. Palladium plummeted 31% in the first half of the year after losing 5.7% in 2022. Currently, the DG spot price is down $5.50 an ounce to $1230.00.

Spot platinum rose 0.5% Thursday to $900.30 an ounce and has lost 1.9% this week. Platinum gained 5.2% in July after falling 9.3% in June and retreating 7.4% in May. Platinum dropped 15% in the first half of the year after surging 10% in 2022. The DG spot price is currently up $7.60 an ounce to $908.20.

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