Gold little changed Wednesday morning ahead of Friday’s economic reports. The yellow metal was steady above $2,500 an ounce but did lose a little ground on a stronger dollar.
The central bank is overwhelmingly expected to begin interest rate cuts next month amid positive inflation data and signs that the labor market is weakening. Fed Chairman Jerome Powell seemed to confirm the central bank’s plans in remarks last week in Jackson Hole, Wyoming. Rate cuts are considered bullish for gold because they make it a more attractive investment than some other assets.
Consumer confidence beat expectations and rose to a six-month high in August amid more positive sentiment on the economy and inflation, data published by the Conference Board showed Tuesday. Gold also hovered near record highs amid geopolitical risks, particularly related to the conflict in the Middle East.
Front-month gold futures slipped $2.30 Tuesday to settle at $2,552.90 an ounce on Comex, though the most-active December contract gained 0.3% in the first two days of the week. Bullion is up 3.2% in August after increasing 5.7% in July, its biggest monthly gain since March. Gold fell 0.3% in June. The metal rose 13% in 2023. The December contract is currently down $14.00 (-0.55%) an ounce to $2538.90 and the DG spot price is $2507.20.
The central bank’s favorite inflation measure, the personal consumption expenditures price index, comes out Friday with July data. GDP data and weekly initial jobless claims come out on Thursday, and next week will bring the closely watched U.S. monthly employment report for August. The Fed closely looks at both labor market and inflation data when crafting monetary policy.
Investors tracked by the CME FedWatch Tool unanimously expect the Fed to begin interest rate cuts at the central bank’s next policy meeting in September. About 65.5% expect a 25 basis point cut, while the rest anticipate a 50 basis point cut. The Fed has kept interest rates at 5.25% to 5.50% for a year after raising them by 5.25 percentage points since March 2022 to rein in inflation.
Front-month silver futures slipped 2 cents Tuesday to $30.43 an ounce on Comex, though the December contract rallied 0.6% in the first two days of the week. Silver is up 5.2% this month after dropping 2.1% in July and falling 2.9% in June. It ticked up 0.2% in 2023. The December contract is currently down $0.616 (-2.02%) an ounce to $29.810 and the DG spot price is $29.43.
Spot palladium gained 0.3% Tuesday to $980.50 an ounce and is up 1.5% so far this week. Palladium is up 3.4% this month after decreasing 4.3% in July and gaining 8.1% in June. Palladium plummeted 38% last year.Currently, the DG spot price is down $16.40 an ounce to $965.50.
Spot platinum fell 0.8% Tuesday to $964.70 an ounce and decreased 0.3% in the first two days of the week. Platinum is down 1.8% in August after losing 2.1% in July and falling 3.7% in June. Platinum dropped 6.8% in 2023. The DG spot price is currently down $20.40 an ounce to $943.40.
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