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Gold News
Market Analysis
Gold prices ended little changed on Friday after US inflation figures came out in line with market expectations.
Prices did manage a modest intraday gain, rising to $2,340 an ounce in the mid-afternoon, European time, but trading at this level could not be sustained and prices slipped back to $2,327 an ounce later in the session, almost unchanged day-on-day.
The keenly-watched US core PCE price index, the US Fed’s preferred measure of inflation, nudged higher by 0.1% in May from April’s level, according to data released Friday. The slight uptick was in line with market expectations, providing little impetus for gold prices on Friday.
Gold’s bounce off the $2,300 an ounce mark on Thursday last week was a bullish signal in itself, as this is a level that was previously tested in early May and again in the second week of June. This suggests buyers are willing to step into the market at levels below $2,300. Other things being equal, this may help to solidify support further at this level.
However, Dutch bank ABN Amro on June 27 issued a research report saying it is cautious on gold prices going forward, and kept its forecast for December 2024 unchanged at $2,000 an ounce – more than $300 below current market prices: Gold Watch – Outlook for gold prices – ABN AMRO Bank
The bank’s rationale included a view that positive momentum is declining in gold prices; unusual positive relationships between gold, the US dollar and US treasury real yields are not expected to last; and a lack of a current shortage in physical gold.
Looking ahead, data releases on Monday include the preliminary German inflation rate for June, followed by the June US ISM Manufacturing PMI figures. After an unexpected decline in May, any further drops in US manufacturing activity could support calls for interest rate cuts.
Further ahead, the markets will also be watching out for Tuesday’s Euro Area inflation rate flash for June, a planned speech by US Fed chair Jerome Powell, and the US JOLTs job openings figures for May.
Kitco Media
Frank Watson
