Gold Prices on Track for Second Straight Weekly Gain
Gold prices were poised for their second consecutive weekly gain as demand strengthened amidst speculation around U.S. Federal Reserve interest rates. Spot gold was slightly down at $2,354.86 per ounce, with a 0.9% increase for the week, following a 1.7% rise the previous week. U.S. gold futures remained steady at $2,368.70.
Factors Driving Gold Prices
One of the key factors supporting gold prices is the recent string of soft economic data, which has led traders to view negative news as positive for the precious metal. This sentiment is driving expectations of earlier and more aggressive rate cuts by the Fed.
US Labour Market and Housing Indicate Economic Slowdown
The latest data on U.S. unemployment benefits and new housing construction suggest a potential economic slowdown. This, coupled with lackluster retail sales, has kept the possibility of a September rate cut from the Fed on the table.
Palladium Sees Strong Gains
On the other hand, palladium experienced a significant spike of over 8%, reaching $974.25 per ounce and hitting a one-month high. Despite this surge, palladium prices are down 11% year-to-date after a substantial 39% drop in 2023.
Additional Insight: The tightness in the palladium market, coupled with high short positions on NYMEX, may lead to short-covering as the quarter-end approaches next week.
StoneX analyst Rhona O’Connell noted that palladium prices are currently trading above key moving averages, a positive signal for investors analyzing technical indicators.
Other Precious Metals Performance
Platinum saw a 1.5% increase to $992.72 per ounce, while silver fell 1.9% to $30.13. Both metals, however, were still heading for weekly gains alongside gold.
(Reporting by Brijesh Patel in Bengaluru, additional reporting by Harshit Verma; Editing by Shreya Biswas)
