Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold firmed today, inching down less than 0.1% to finish at $2,332.50, as uncertainty about interest rates continued to stall the recent momentum propelling it to record highs. Gold lost 3.5% for the week, its worst since last December. Silver added 0.2% to end at $30.33 but still lost 2.3% this week.

Last week, data showing softer inflation and a weakening labor market raised hopes that the Fed would cut interest rates twice in 2024, with the first cut coming in September. New York spot gold rallied sharply on the dovish rate speculation, closing at a new all-time high of $2,438.50 on Monday.

But a succession of Fed officials this week tamped down the rate-cut exuberance, reinforcing the Feds mantra of higher for longer and prompting traders to take profits from golds record rally. The midweek release of minutes from the last Fed meeting, which showed various officials open to raising interest rates should risks to inflation materialize, accelerated the selloff.

Fed fund futures traders now see less than a 50% chance of a September rate cut, down from 65% one week ago.

Oil prices dropped more than 2% this week on concerns that the Fed may keep interest rates higher for longer and undercut demand. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Despite this weeks decline, gold has rallied more than 13% this year behind unprecedented central bank buying, aggressive physical demand in China, safe-haven inflows because of acute geopolitical turmoil, and the prospects of falling interest rates at home and abroad.

Platinum picked up 0.8% today but lost 4.7% this week. Palladium dropped 0.4% for a weekly decline of $%.

At the New York spot close: gold dipped $2.50 to $2,332.50; silver added 5 cents, to $30.33; platinum picked up $8.20 to $1,038.60; and palladium shed $4.20 to $8970 an ounce.