On Friday, May 12, gold futures closed lower as the strong dollar continued to weigh on the market. With investors keeping a close eye on the progress of negotiations to raise the US government’s debt ceiling, the potential for a default on debt payments looms on June 1 if the ceiling is not adjusted.
Gold futures were down 70 cents, or 0.03%, to close at $2,019.80 an ounce, with a 0.3% drop for the week. Silver futures were down 27 cents, or 1.11%, at $24.154/ounce. Meanwhile, platinum futures fell $38.00, or 3.44%, to close at $1,067/ounce, and palladium futures were down $40.20, or 2.6%, at $1,513.80/ounce.
As the dollar index against a basket of six major currencies rose 0.62% to 102.6852, gold contracts became cheaper for investors in other currencies, leading to the decline in gold prices.
Economic data released on Friday was mixed. The US Department of Labor reported that the import price index rebounded in April for the first time since December 2022, driven by rising energy prices. However, the University of Michigan’s consumer sentiment index fell to 57.7 in May, below analysts’ expectations of 63.0 from 63.5 in April, as concerns over inflation and the banking sector crisis persisted.
Consumers expect inflation to hit 4.5% in the next year and 3.2% over the next five years, the highest level since June 2008. With all these factors in play, gold futures are likely to continue facing pressure from a strong dollar, making it a less attractive investment option for investors.
Overall, gold futures remain vulnerable to a range of market factors, and investors will be closely watching the situation in the US and global economy in the weeks ahead.
The Spot Market is Closed
Saturday, May 13, 2023