Gold Recovers from three-week lows

Gold Recovers from three-week lows

Gold recovers from three-week lows early Friday,iday aided by the dollar’s retreat after better-than-expected Chinese data. Traders now turn their eyes to next week’s meeting of the Federal Reserve for guidance. It’s widely expected that the Fed will leave interest rates unchanged.

Data showed China’s factory output and retail sales grew at a faster pace in August, boosting recovery hopes in the world’s top bullion consumer.

Economic reports on U.S. industrial production, University of Michigan consumer sentiment and the Empire manufacturing index are due out Friday and may provide additional direction. 

Front-month gold futures ticked up 30 cents Thursday to settle at $1,932.80 an ounce on Comex, though the December contract retreated 0.5% in the first four days of the week. Bullion dropped 2.2% in August after rising 4.1% in July and losing 2.7% in June. The metal is up 5.8% in 2023. The DG spot price is currently up $14.8 (+0.77%) an ounce to $1947.60 and the DG spot price is $1926.90.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.3% Thursday, Reuters reported. 

The U.S. “core” consumer price index – the prices of goods excluding volatile food and energy costs – came in higher than expected on Wednesday in from the Labor Department. Core CPI rose 0.3% in August from a month earlier, and gained 4.3% from a year earlier. Economists had forecast 0.2% and 4.3%, respectively. The headline number rose 0.6% in August, its biggest monthly gain of 2023. 

Wholesale inflation, as measured in the producer price index, rose 0.7% last month, according to data released Thursday. The figure was higher than the 0.4% estimate and the biggest monthly gain since June 2022. But excluding food and energy, core PPI rose 0.2%, in line with estimates. 

The Fed watches inflation statistics and labor market data when determining monetary policy. The central bank has raised rates by 5.25 percentage points since March 2022 in an effort to curb inflation. 

About 97% of investors tracked by the CME FedWatch Tool are betting that the Fed will keep its federal funds rate unchanged next week at 5.25% to 5.50%. Just 3% expect it to raise rates another 25 basis points. Most still expect the Fed to hold at the remainder of policymakers’ meetings this year, in November and December.

The European Central Bank on Thursday raised its benchmark interest rate to a record level, its 10th consecutive interest rate hike.  

Front-month silver futures lost 0.8% Thursday to settle at $22.99 an ounce on Comex, and the December contract retreated 0.8% in the first four days of the week. Silver slipped 0.6% in August after gaining 8.5% in July and dropping 2.4% in June. It’s down 4.4% in 2023. The December contract is currently up $0.486 (+2.11%) an ounce to $23.480 and the DG spot price is $23.24.

Spot palladium decreased 0.9% Thursday to $1,265.50 an ounce and is up 4.3% so far this week. Palladium slid 5.3% last month after rising 3.6% in July and falling 9.5% in June. Palladium has plummeted 30% so far this year. The current DG spot price is up $20.70 an ounce to $1287.50.

Spot platinum gained 0.6% Thursday to $915.20 an ounce and rose 1.7% so far this week. Platinum advanced 1.7% in August after gaining 5.2% in July and falling 9.3% in June. Platinum is down 14% in 2023. The DG spot price is currently up $20.60 an ounce to $935.70.

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