Andrew
Gold continued to soar last week as cooling inflation in the US suggested rate hikes might not be as aggressive as anticipated.
American producer prices unexpectedly fell for the first time in more than two years in July, while consumer prices also decelerated last month.
The data supported the case for the Federal Reserve to be less hawkish, but resulted in gold consolidating just below US$1 800 an ounce rather than pushing higher. Swaps referencing the Fed’s September meeting signal some uncertainty over whether a half-point or another 75 basis-point rate hike is on the cards.
San Francisco Fed President Mary Daly said while the fight against rapid price growth is far from over, a half-point hike in September is still her base case, although she is open to an increase of three-quarters of a percentage point.
The precious metal has now rebounded around 6 percent from a low in mid-July on a combination of fears of a global recession and heightened US-China tensions over Taiwan.
It’s also been aided by declines in the dollar in recent weeks.
Gold has struggled to keep up its recent bullish momentum, despite inflation data supporting the view that the Fed’s rate hikes are likely to slow, said Fawad Razaqzada, a market analyst at StoneX.
Some consolidation may be needed for the metal to gear up for a clean breakout above US$1 800 an ounce, he said.
Spot gold rose 0,1 percent to US$1 791,92 an ounce as of Friday afternoon in Singapore, and was up 0,9 percent last week. The Bloomberg Dollar Spot Index slipped 0,1 percent. Palladium and platinum fell, while silver advanced. – Bloomberg
Online Reporter