Gold futures closed higher on Thursday (May 26) on the back of the dollar’s depreciation. The deteriorating U.S. economic data also helped to buy gold as a safe haven.
- The gold futures were up $1.3, or 0.07%, at $1,847.6 per ounce.
- The Silver futures were up 9.5 cents, or 0.43%, at $21.965 an ounce.
- The Platinum futures were up $8.1, or 0.87%, at $937.4 per ounce.
- The palladium futures were up $4.20, or 0.21%, at $1,993.50 an ounce.
Gold contracts were driven by the depreciation of the dollar. The dollar index against the six major currencies in a basket of currencies fell 0.22% to 101.8290. The weakening of the dollar makes gold contracts cheaper for investors holding other currencies.
In addition, weak U.S. economic data is also a factor supporting safe-haven buying. The U.S. Department of Commerce published its second estimate of gross domestic product (GDP) for the first quarter of 2022. According to the data, the GDP contraction is expected to be 1.5% compared to the previously reported 1.4% contraction in the first estimate. Analysts had expected the US economy to contract by only -1.3%.
The National Association of Realtors (NAR) reported that its pending home sales index fell 3.9% in April from the previous month to 99.3. That’s the lowest level since April 2020, and it fell for the sixth consecutive month, influenced by low home inventories, rising home prices, and an increase in mortgage rates.
The Pending Home Sales Contract Index is a measure of the number of used home sales contracts that have been signed but not yet closed. It usually takes about 1-2 months for a contract to be signed and the sale to be completed.
In addition, the Labor Department announced that initial claims for unemployment benefits fell by 8,000 last week to 210,000.
The number of initial jobless claims is well below 215,000, the weekly average before the COVID-19 pandemic in the U.S.
Meanwhile, the number of Americans continuing to claim unemployment benefits rose by 35,000 to 1.35 million, but that is the lowest level since 1969.
The Spot Market is Open
Friday, May 27, 2022