Gold futures eased back on Thursday, a day after settling at their highest in nearly a month, as investors looked to the latest U.S. economic data and Federal Reserve Chairman Jerome Powell’s congressional testimony to help gauge the next direction for the metal’s prices.
August gold
GCQ21,
+0.03%
GC00,
+0.03%
declined by $2.80, or nearly 0.2%, at $1,822.20 an ounce, pulling back after the commodity’s highest finish since June 16 on Wednesday, based on the most-active contract.
Silver futures for September delivery SIU21 were up 8.9 cents, or 0.3%, at $26.36 an ounce.
Investors are watching for more clues about monetary policy from Powell after the central bank chief, in front of the House Financial Services Committee on Wednesday, said that removing some of the Fed’s stimulus was some way off as the labor market struggles to rebound from the pandemic.
Powell also described inflation as a short-lived phenomenon that would eventually revert to the mean after a COVID-fueled surge that has been stoked by supply shortages amid spiking demand.
Investors eyed the Fed chief’s second day of testimony Thursday, in front of a Senate committee.
“Remember that the precious metal is highly sensitive to a change in interest rates as a hike would mean a rise in opportunity cost for holding the non-interest bearing asset,” said Naeem Aslam, chief market analyst at AvaTrade, in a market update. Powell “extinguished fears of revising the interest rates in the short term.”
Economic reports offered a mixed picture of the U.S. recovery from the COVID pandemic on Thursday.
U.S. initial jobless benefit claims fell to 360,000 from 386,000 in the week ended July 10. The U.S. import price index climbed 1% in June, and prices minus volatile fuel rose 0.7% on the month. Meanwhile, the Philadelphia Manufacturing Index fell to 21.9 from 30.7, while the Empire State manufacturing index rose to a record 43 in July from 17.4 in the prior month.
Prices for both gold and silver trade a bit higher for the week so far.
It’s “difficult to determine the primary bullish force serving to lift gold and silver prices this week, but we suspect that persistent resiliency in U.S. Treasury bond prices [lower Treasury yields] are at the top of the list,” analysts at brokerage Zaner wrote in a daily report.
It is also possible that uncertainty on the economy, given disappointing U.S. data and increasing infections of the delta variant of COVID, has been providing a measure of “flight to quality buying interest,” they said.
On Comex Thursday, September copper
HGU21,
+1.68%
tacked on 1.7% to $4.34 a pound. October platinum
PLV21,
+1.41%
added nearly 1.4% to $1,143.30 an ounce, but September palladium
PAU21,
-2.38%
shed almost 1.9% to $2,774 an ounce.
