Tuesday, July 16, 2024
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Gold prices set for quarterly gain, focus on inflation data

by xyonent
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Gold prices fell slightly on Friday but are on track for a third straight quarterly gain as investors focus on key U.S. inflation data later in the day that could shed some light on the Federal Reserve’s interest rate cutting stance.

Basics

* Spot gold was down 0.3% at $2,321.39 an ounce as of 0157 GMT, up about 4% in prices for the quarter. Bullion was flat for the week and month.

* U.S. gold futures fell 0.2 percent to $2,332.10.

* The dollar rose 0.2 percent, helping to lift the price of gold for holders of other currencies, while benchmark 10-year Treasury yields also rose slightly on the day. * Investors are closely watching the personal consumption expenditures (PCE) price index report, due at 1230 GMT, for further clues on the timing and size of interest rate cuts this year. * Data showing a fall in business investment in May highlighted weakening economic momentum, while a drop in exports widened the goods trade deficit. * The government’s third estimate of gross domestic product (GDP) for the January-March period confirmed that economic growth slowed sharply in the first quarter.

* Federal Reserve Governor Michelle Bowman reiterated on Thursday that she is not yet ready to support the central bank cutting interest rates because inflation pressures remain high.

* As interest rates rise, the opportunity cost of holding non-yielding gold bars increases.

* Spot silver fell 0.5% to $28.91 an ounce, platinum rose 0.7% to $994.42 and palladium rose 1.5% to $943.22.

Data/Events (GMT) 0600 UK GDP QoQ 1Q 0645 France CPI (EU benchmark) flash YYY June 0645 France CPI flash YYY (unofficial) June 0645 France Producer Price Index YYY May 0755 Germany Unemployment change, rate (SA) June 1230 US Adjusted Payrolls May 1230 US Core PCE Price Index YYY May 1230 US PCE Price Index YYY May 1400 US Michigan Sentiment final June.

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