Gold steady ahead of jobs reports after experiencing an early morning dip. Investors await the release of some of the last major economic indicators due out before the Federal Reserve policy meeting later this month. Gold briefly lost ground early Wednesday due to an equity sell-off. DG spot gold fell 0.2% to $2,476.14 per ounce, hitting its lowest since Aug. 22nd, while gold futures were also down 0.2% to $2,519.10. Bulls quickly stepped in to buy the dip, reclaiming most of the lost ground.
The closely watched U.S. monthly employment report for August comes out Friday. Before that, the ADP Employment Report on private payrolls for August and the weekly U.S. initial jobless claims data for last week are scheduled for release Thursday. The Fed’s favorite inflation measure, the personal consumption expenditures price index, came in in line with expectations last week with July data. The Fed closely looks at both labor market and inflation data when crafting monetary policy.
U.S. manufacturing data for August showed a moderate contraction in data released Tuesday. Wednesday brings the release of the Beige Book, the economic report from the Fed’s 12 regional banks, plus job openings and factory orders data.
Front-month gold futures fell 0.2% Tuesday to settle at $2,523.00 an ounce on Comex. The most-active December contract fell 0.7% last week. U.S. financial markets were closed Monday for the Labor Day holiday. Bullion gained 2.2% 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 $3.30 (-0.13%) an ounce to $2519.70 and the DG spot price is $2485.50.
The central bank is widely expected to begin interest rate cuts this month amid positive inflation data and signs that the labor market is weakening. Rate cuts are considered bullish for gold because they make it a more attractive investment than some other assets.
Investors tracked by the CME FedWatch Tool unanimously expect the Fed to begin interest rate cuts at the central bank’s next policy meeting ending Sept. 18. About 59% 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.
Core PCE, which includes volatile food and energy prices, increased 0.2% in July from June and was up 2.6% from a year earlier, better than the 2.7% estimate. The Fed has long had a 2% target for inflation. Including food and energy prices, headline PCE rose 0.2% on the month and 2.5% for the year, in line with expectations.
Personal income increased 0.3% in July, slightly higher than the 0.2% estimate. Consumer spending grew 0.5%, in line with forecasts.
Front-month silver futures dropped 2.7% Tuesday to $28.34 an ounce on Comex. The December contract fell 3.7% last week. Silver gained 0.7% last 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 up $0.136 (+0.48%) an ounce to $28.480 and the DG spot price is $28.15.
Spot palladium declined 2.7% Tuesday to $952.50 an ounce. It rose 1.4% last week. Palladium increased 3.2% last month after decreasing 4.3% in July and gaining 8.1% in June. Palladium plummeted 38% last year. The DG spot price is currently down $4.80 an ounce to $946.50.
Spot platinum fell 1.7% Tuesday to $915.50 an ounce. It decreased 3.7% last week. Platinum slid 5.2% in August after losing 2.1% in July and falling 3.7% in June. Platinum dropped 6.8% in 2023. Currently, the DG spot price is down $3.90 an ounce to $910.00.
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