Gold futures rallied on Friday, gaining $1.10, or 0.06%, to close at $1,998.50 per ounce, as geopolitical unrest in the Middle East continued to attract investors seeking refuge in the precious metal.
In contrast, silver prices experienced a marginal decline of 2.10 cents, or 0.09%, ending the day at $22.887 per ounce. Meanwhile, platinum futures saw a drop of $3.20, or 0.35%, settling at $905.80 per ounce, and palladium slipped by $12.60, or 1.10%, to close at $1,130.20 per ounce.
The surge in gold prices came as reports emerged of Israeli forces conducting the largest-ever ground attack in the Gaza Strip, prompting investors to flock to gold contracts.
Market watchers are also closely monitoring the Federal Reserve’s (Fed) monetary policy meeting scheduled for next week. The latest data from CME Group’s FedWatch Tool indicates a strong consensus, with investors assigning a 99.5% probability that the Fed will maintain interest rates within the range of 5.25-5.50%. The upcoming meeting is set to take place on October 31 – November 1. Additionally, investors are giving a 79.9% weight to the possibility of the Fed maintaining the same interest rates during the meeting on December 12-13, up from 57.9% last month.
On the economic front, the U.S. Commerce Department reported that the general Personal Consumption Expenditures (PCE) price index, which encompasses both food and energy categories, rose by 3.4% year-on-year in September, in line with analysts’ predictions. This figure mirrored August’s 3.4% increase. Furthermore, the general PCE index exhibited a monthly uptick of 0.4% in September, surpassing the market’s expectations of 0.3%, following an identical increase in August.
The core PCE index, an inflation gauge that excludes food and energy prices and holds significance for the Federal Reserve, registered a 3.7% year-on-year rise in September, in accordance with forecasts. This was a slight decline from August’s 3.8% increase. On a monthly basis, the core PCE index increased by 0.3%, consistent with analysts’ expectations and an improvement over the 0.1% rise observed in August. Notably, the PCE index is regarded as a comprehensive measure of inflation that captures changes in consumer behavior and encompasses a broader range of goods and services compared to the Consumer Price Index (CPI).
In addition, a University of Michigan survey released on Friday showed a decline in the U.S. Consumer Sentiment Index, which dropped to 63.8 in October from September’s 68.1, albeit surpassing analysts’ projections of 63.0. This decline in consumer sentiment was attributed to concerns about inflation. Notably, consumers expect inflation to increase to 4.2% over the next year, up from the preliminary figure of 3.8%. Meanwhile, consumer expectations for inflation over the next five years remained stable at 3%, unchanged from the previous month’s survey results.
The Spot Market is Closed
Saturday, October 28, 2023