In a mixed week for precious metals, gold futures made a modest recovery on Friday, closing up 20 cents or 0.01% at $1,942.70 per ounce. However, the week saw gold prices decline by 1.2%, largely due to the upward pressure exerted by rising U.S. Treasury yields and a strengthening dollar.
Silver followed suit, falling by 0.28%, or 6.60 cents, to settle at $23.174 per ounce, while platinum futures dropped by 1.63%, or $14.80, closing at $894.80 per ounce. Palladium, too, experienced a 1.9% decline, settling at $1,192.30 per ounce, falling by $22.70.
The slight rebound in gold prices on Friday came after a near two-week low the previous day, caused by the resilience of the dollar and the ascent of Treasury yields.
Investors are now keenly observing the upcoming release of the U.S. Consumer Price Index (CPI) on Wednesday, September 13th. The CPI serves as a crucial gauge of inflation in consumer spending and holds significant influence over the potential direction of U.S. interest rates. The Federal Reserve (Fed) is scheduled to convene for a monetary policy meeting on September 19-20, and the CPI data will play a pivotal role in shaping the Fed’s stance.
Market expectations, as reflected in CME Group’s FedWatch Tool, currently suggest that the Fed will maintain interest rates in the range of 5.25-5.50% during the upcoming meetings. However, the strong performance of the U.S. service sector index and a seven-month low in unemployment benefit claims have added weight to the notion that the Fed may opt to raise interest rates by 25 basis points, pushing the range to 5.50-5.75%, at its November meeting.
As the precious metals market navigates these uncertainties, gold continues to be a key asset to watch, offering investors a hedge against economic turbulence and inflationary pressures. With the CPI data on the horizon, all eyes are on how it may influence the Federal Reserve’s policy decisions in the coming months, ultimately shaping the future trajectory of gold and other precious metals.
The Spot Market is Closed
Saturday, September 9, 2023