Gold steady Friday, headed for a sixth weekly gain as investors access this morning’s inflation data that lifts rate cut hopes. U.S. inflation data came in line with expectations, reinforcing bets that the Federal Reserve may continue with interest rate cuts later this year. Meanwhile, platinum is at over a 12-year high.
Core inflation was little changed in August, according to the personal consumption expenditures (PCE) price index. The core PCE index showed August’s inflation at 2.9% on an annual basis after rising 0.2% for the month. Both were in line with forecasts. Although the Fed’s target inflation is 2%, analysts say the slightly higher number for August are unlikely to impact policymakers who indicated two more quarter percentage point reductions are likely before the end of the year.
The Federal Reserve’s favorite inflation report, the personal consumption expenditures price index, comes out on Friday and should provide direction. Fed Chairman Jerome Powell indicated earlier this week that the central bank was trying to weigh a worsening job market with rising inflation when setting monetary policy.
December gold futures rose $3 Thursday to settle at $3,771.10 an ounce on Comex, and the front-month contract is up 1.8% so far this week. Bullion is up 7.3% this month after adding 5% in August and gaining 1.2% in July. It’s up 43% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The December contract is currently up $21.30 (+0.56%) an ounce to $3792.40 and the DG spot price is $3772.20.
U.S. second-quarter GDP came out Thursday and showed that the U.S. economy grew at the fastest pace in almost two years on strong consumer spending. Also Thursday, U.S weekly initial jobless claims for last week showed a drop to the lowest level since July.
Last week, the Fed cut interest rates for the first time in nine months, lowering them by 25 basis points to 4.00% to 4.25%. Most investors are now anticipating another two rate cuts before the end of the year. Typically, lower interest rates are bullish for gold, making it a more attractive alternate investment.
More than 85% of the investors tracked by the CME FedWatch Tool are betting that the Fed will reduce rates by 25 basis points in October, with the rest expecting the central bank to hold rates unchanged. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts last year.
Separately, China’s August net gold imports via Hong Kong fell 39%, in August from July, Reuters reported, citing Hong Kong Census and Statistics Department data released Thursday.
Front-month silver futures rose 2.1% Thursday to settle at $45.11 an ounce on Comex, and the December contract is up 5% this week. Silver is up 11% this month after rallying 11% in August and rising 1.5% in July. It rose 21% in 2024. The December contract is currently up $0.701 (+1.55%) an ounce to $45.815 and the DG spot price is $45.58.
Spot palladium gained 3% Thursday to $1,258.00 an ounce and surged 8.7% in the first four days of the week. Palladium is up 13% in September after declining 7.8% in August and climbing 8.8% in July. Palladium dropped 17% last year. Currently, the DG spot price is up $23.00 an ounce to $1282.50.
Spot platinum rallied 3% Thursday to $1,526.40 an ounce and is up 8% so far this week. It’s up 12% in September after rising 5.9% last month and dropping 3.9% in July. Platinum lost 8.4% in 2024. The DG spot price is currently up $57.80 an ounce to $1585.90.
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