Gold could experience weekly decline as robust US economy comes into focus

8 Sep 2023 , 10:11 AM

As the dollar and Treasury yields held steady on Friday and strong U.S. economic statistics raised concerns that the Federal Reserve might hold interest rates higher for longer, gold prices increased but were still headed for a weekly fall.

Spot gold was up 0.2% at $1,922.87 per ounce but was forecast to drop 0.8% on a weekly basis. Futures for U.S. gold increased 0.2% to $1,946.90.

Supported by a steady stream of positive U.S. economic data, the dollar was on track for its longest weekly gain streak in nine years.

According to figures released on Thursday, the number of new applications for state unemployment benefits surprisingly decreased last week to its lowest level since February.

After a brief increase following the release of the jobs report on Thursday, U.S. Treasury rates fell as investors focused on the remarks of numerous Fed members.

John Williams, president of the New York Fed, kept his options open on the direction of U.S. interest rates while acknowledging that there may not be a pressing need to raise rates later this month given the economy’s improved balance and declining inflation.

Getting the economy on the ‘golden path,’ where inflation declines but recession is averted, is achievable but not a given, according to Chicago Fed President Austan Goolsbee.

While it ‘could be appropriate’ to miss an interest rate increase in September, Dallas Fed President Lorie Logan indicated that additional policy tightening will likely be required to get inflation down to 2% in a timely manner.

Data showed that at the end of August, China owned 69.62 million fine troy ounces of gold, up from 68.69 million ounces at the end of July.

Spot silver increased by 0.2% to $23.01 an ounce, and platinum increased by 0.3% to $906.14. They were both expected to have their worst weeks since June 23, though.

Palladium increased by 0.2% to $1,214.83, but it is still headed for its fourth straight weekly decline.

For feedback and suggestions, write to us at [e-mail]