31/05/2024: This Week in Gold with Market Updates: 

Price Action: 

Gold Price: 

Gold opened the week trading at $2,334 per ounce after closing the previous week 3.34% lower. Gold is currently on track to close the week slightly lower. Price moved sideways for much of the week, with little variation day to day. 

On Monday, gold opened at $2,334 per ounce and experienced a slight gradual move to the upside. There was little to no financial or economic data that was influencing price movements. This slight move higher coincided with a decline in the DXY, highlighting the inverse relationship between the two. Treasury Yields made no moves due to the U.S. market being closed in honour of Memorial Day. Gold ultimately closed the day 0.74% higher at $2,351 per ounce. 

On Tuesday, gold showed little fluctuation, trading within a tight range for most of the day. Opening at $2,351 per ounce, price climbed $10 slowly over the course of the day before closing at $2,361 per ounce. The DXY experienced a daily gain also, which limited any upside potential that gold had. Treasury Yields were also seen to rise at a more rapid rate, also dampening the upside potential that gold had on Tuesday. 

On Wednesday, gold experienced its first decline for the week. This decline contrasted a large move to the upside for DXY and Treasury Yields. Although both DXY, and Treasury yields had risen the day prior also, this move higher was more rapid and more influential on gold’s move lower. Gold ultimately closed the day 0.48% lower at $2,338 per ounce. 

On Thursday, gold opened at $2,338 per ounce and began to move higher throughout the day. This was boosted by a large decline in the DXY after its two day streak to the upside. Treasury Yields also moved lower, although at a slower pace than DXY. This contributed to gold’s slight 0.22% move higher for the day. Gold closed the day trading at $2,343 per ounce.  

At the time of writing, gold is moving lower after some sideways movement for most of the day. Gold is trading at $2,328 per ounce, meaning it is on track to close the week 0.25% lower. 

Silver Price: 

Silver opened the week trading at $30.36 per ounce, after closing the previous week 3.61% lower. Silver is currently on track to close the week lower, for the second consecutive time. Price saw two daily moves to the upside followed by three consecutive daily moves lower. 

At the time of writing, silver is trading at $30.36 per ounce, meaning it is on track to close the week at the same level it opened at.

Market Updates: 

21/05/2024: U.S. Consumer Confidence

On Tuesday, the U.S. Consumer Confidence Index was released, showing a figure of 102, significantly higher than the expected 96.1 and the previous month’s figure of 97. The Consumer Confidence Index measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation. Higher confidence indicates more willingness to spend, which can drive economic growth.

This higher-than-expected consumer confidence suggests that consumers are feeling more optimistic about their economic prospects, which can lead to increased consumer spending and potentially higher economic growth. For the gold and silver markets, this data might reduce the immediate demand for safe-haven assets, as investors may shift their focus to riskier assets like stocks. However, sustained consumer confidence could also contribute to inflationary pressures, which might support gold and silver prices as hedges against inflation.

23/05/2024: EU Consumer Confidence & U.S. Initial Jobless Claims

EU Consumer Confidence:

The EU Consumer Confidence Index for May came in at -14.3, matching expectations and slightly better than the previous month’s -14.7. This index measures the level of optimism that consumers have about the economic situation in the Eurozone.

For the precious metals market, stable consumer confidence in the EU suggests that there is no immediate increase in economic uncertainty, which may limit the demand for gold and silver as safe havens.

U.S. Initial Jobless Claims:

Initial Jobless Claims in the U.S. came in at 219,000 for the week, slightly above the expected 218,000 and higher than the previous week’s 215,000. This data indicates the number of people filing for unemployment benefits for the first time and is a key indicator of labor market health.

Higher jobless claims could signal a weakening labor market, which might increase economic uncertainty and support gold and silver prices as safe-haven assets. Conversely, if this increase is viewed as a temporary fluctuation, it might have a limited impact on precious metals.

24/05/2024: EU CPI & EU Core CPI

EU CPI:

The EU Consumer Price Index (CPI) for May came in at 2.6% year-over-year, slightly above the expected 2.5% and higher than the previous month’s 2.4%. The CPI measures the average change in prices over time that consumers pay for a basket of goods and services, serving as a key indicator of inflation.

Rising inflation can increase the demand for gold and silver as hedges against the decreasing purchasing power of fiat currencies. The higher-than-expected CPI indicates mounting inflationary pressures in the Eurozone, which could support precious metals prices. In this environment however, gold is more reactive to falling inflation due to inflation’s current relationship with potential rate cuts. 

EU Core CPI:

The EU Core CPI, which excludes volatile items such as food and energy, came in at 2.9% year-over-year, higher than the expected 2.7% and the previous month’s 2.7%. Core CPI provides a clearer picture of underlying inflation trends.

Core U.S. PCE Price Index

U.S. PCE came in at 2.8% Y-o-Y, which was in line with expectations and on par with the previous month’s figure. The month-on-month figure came in slightly lower than expected at 0.2%, which was also a slight improvement on the previous month’s figure of 0.3%. 

U.S. Personal Spending

Month-on-month data for U.S. personal spending was seen to decrease to 0.2%, down 0.5% from the previous month’s figure of 0.7%. This was also lower than the expected 0.3%. Lower consumer spending may indicate the potential for a slowing economy, thus ramping up fears of recession, the potential for rate hikes, and a rise in precious metals. 

FED Speeches:

Throughout the week, several FED officials spoke on economic conditions and monetary policy. FOMC Member Williams highlighted that recent high inflation readings are seen as a reversal of unusually low figures from last year, rather than a break in the overall downtrend. He emphasized the FED’s goal of achieving maximum employment and price stability but gave little indication about future interest rate moves.

FED member Bostic indicated that it is unlikely the FED will cut rates in July, reinforcing a stance of caution in monetary policy changes. Meanwhile, FED Kashkari surprised markets by keeping the door open for potential rate hikes, which could signal a more hawkish approach if inflation does not continue to trend downward.

Implications for Gold and Silver Markets:

The mixed messages from FED officials create uncertainty about the future path of interest rates. Hawkish comments, like those from Kashkari, could put downward pressure on gold and silver as higher interest rates increase the opportunity cost of holding non-yielding assets like precious metals. Conversely, dovish comments or indications of prolonged low rates support gold and silver prices.

In summary, this week’s economic data and FED commentary paint a mixed picture for the gold and silver markets. While improved consumer confidence and lower unemployment rates may reduce immediate safe-haven demand, potential dovish monetary policy shifts could provide support for precious metals. Investors should closely monitor upcoming data releases and FED communications to gauge future market direction.