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Gold prices fell Friday, dipping below $2,500/oz, as Treasury yields and the dollar pushed higher after U.S. inflation data matched expectations, reinforcing the likelihood that interest rate cuts will be conducted at a measured pace.
U.S. Inflation Data and Gold Prices
Data from the Commerce Department showed the personal consumption expenditures price index, considered the Federal Reserve’s favorite inflation gauge, rose 0.2% last month, matching economists’ forecasts.
The data supports the Fed’s intentions to begin easing monetary policy as soon as the upcoming September meeting, with most market watchers expecting the size of the first rate cut at a modest 25 basis points.
Investors will now look ahead to the U.S. non-farm payroll report due next week to determine the potential interest rate cut at the September meeting.
Gold and Silver Performance
Front-month Comex gold for September delivery settled -1.2% to $2,493.80/oz and finished 0.7% lower for the week but gained 2.7% for the month, marking its sixth consecutive monthly gain.
Front-month September silver closed -2.8% on Friday, shedding 3.6% for the week but just 0.1% for the month. Silver is up 20% YTD.
ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), (OUNZ), (SLV), (PSLV), (SIVR), (SIL), (SILJ)
Market Strategist Insights
TD Securities strategist Daniel Ghali anticipates near-term downside for gold due to extreme macro funds positions. He highlighted that systematic trend followers are max-long, and Shanghai positioning is at record highs despite weak physical demand in China.
Ghali mentioned that a move lower toward $2,430/oz could trigger liquidation in the gold market.
More on gold and gold miners
Additional Insight:
– It is important for investors to closely monitor economic indicators like U.S. inflation data and non-farm payroll reports to gauge the potential impact on gold prices.
– The performance of gold and silver in the market can be influenced by a variety of factors, including inflation expectations and global economic conditions.
– Insights from market strategists and analysts can provide valuable perspectives on the direction of precious metals prices and market trends.
