Gold futures witnessed a second consecutive day of decline on Tuesday, August 8, as the relentless strength of the dollar continued to cast a shadow over the market. With all eyes trained on the impending release of US inflation figures on Thursday, market participants are eager to glean insights into the interest rate trajectory of the Federal Reserve (Fed).
The day’s trading saw gold futures drop by $10.10, translating to a 0.51% decrease, ultimately settling at $1,959.90 per ounce. In parallel, silver futures also faced a slump, experiencing a dip of 42.50 cents (1.83%), closing at $22.807 per ounce. Similarly, platinum futures bore the brunt of the market pressure, plummeting by $22.70 (2.45%) to conclude at $904.20 per ounce. Palladium futures followed suit, recording a decline of $18.10 (1.5%) to reach $1,218.10 per ounce.
The catalyst for these declines was the robust performance of the dollar index against a basket of six major currencies, which registered a 0.47% surge to 102.5205 overnight. This surge in the dollar’s value caused gold contracts, which are priced in dollars, to become more expensive for investors using other currencies.
Edward Moya, a reputable analyst at OANDA, attributed the dollar’s overnight strength to investors flocking to the greenback as a safe-haven asset. This move came in response to underwhelming Chinese trade data and apprehensions regarding the credit rating downgrades of several US banks by Moody’s.
Market participants are now eagerly awaiting the US Consumer Price Index (CPI) report, slated for release on August 10. The CPI is a vital metric that gauges inflation based on consumer spending patterns and holds implications for the interest rate stance of the Federal Reserve.Market analysts are anticipating a notable increase in the headline CPI, including food and energy components, which is projected to climb by 3.3% year-on-year for the month of July. This comes on the heels of a 3.0% rise in June. The core CPI, which excludes the volatile food and energy sectors, is expected to surge by 4.7% year-on-year in July, following a 4.8% jump in June.
In conclusion, the gold market’s downward trajectory for two consecutive days can be attributed to the resolute strengthening of the dollar. As the market awaits the release of US inflation figures, investors are poised to glean insights into the Federal Reserve’s potential interest rate decisions. The intricate interplay between economic indicators, market sentiment, and global events will continue to shape the precious metals landscape in the coming days.
The Spot Market is Open
Wednesday, August 9, 2023
| Metals Updated at | USD Bid/Ask | Ounce Change | Low/High |
| Gold 11.15 | 1,929.80 1,930.80 | +4.60 +0.24% | 1,923.60 1,931.40 |
| Silver 11.15 | 22.87 22.97 | +0.13 +0.55% | 22.69 23.00 |
| Platinum 11.15 | 904.00 914.00 | +3.00 +0.33% | 897.00 915.00 |
| Palladium 11.00 | 1,205.00 1,265.00 | +5.00 +0.42% | 1,196.00 1,267.00 |
| Rhodium 05.00 | 3,350.00 4,750.00 | 0.00 0.00% | 3,350.00 4,750.00 |