GOLD PRICES rose to $1354 per ounce Friday lunchtime in London after the release of worse-than-expected US retail sales data, breaking out of the morning's range between $1336-1340, writes Thomas Podvin at BullionVault.
Before the US data were published at 1.30pm London time, the US Dollar had earlier remained solid, supported by comments from San Francisco Fed President John Williams on a real possibility of a US interest rate hike after this year's US election the strength of the greenback.
US major indices closed together at record highs Thursday, a first since 1999 according to Bloomberg. Some commentators in contrast called gold's earlier losses a "Rally Losing Steam".
European stock markets, bar the German index Dax, all rose on Friday morning, while Asian equities closed higher.
German economic growth was not as slow as expected in the second quarter according to a report from the Federal Statistics Office. The Euro slightly rose versus the Dollar to $1.1152.
"Gold should hold steady above $1300," a China-based trader told Reuters, warning that "there could be a knee-jerk reaction on a rate hike."
Brent crude oil rebounded and was set for weekly gains as silver and platinum prices eased back, as did copper prices.
Silver broke through the $20 level down to $19.89 early morning but was still up on the week, a level first reached early July in the aftermath of the Brexit referendum. Silver in GBP and EUR was also higher on the week Friday morning.
While US Dollar gold prices were range-bound hovering around 2% under July multi-years highs, gold in Pounds Sterling and Japanese Yen prices were set for a weekly gain of 1% and 0.5% respectively.
In contrast, gold for Eurozone investors traded in a €3 range on both sides of €1,200 per ounce losing around 0.4% on the week.
Confirming that gold demand was impacted by the stocks rallies, “there seems to be money swishing between the two,” said senior commodity strategist from ANZ bank, Daniel Hynes, indicating that the investors' appetite for precious metals was decreasing as the equity markets rebounded.
Worldwide gold demand soared to reach 2,335 tonnes in H1 2016 led by investment demand. This was 16% higher than the previous record set in H1 2009, as shown in the World Gold Council's latest quarterly Gold Demand Trends report, published on Thursday.
"Continued economic, political and social uncertainty around the globe" were quoted by the WGC as causes for a strong demand in gold "as high quality, liquid asset".
Alistair Hewitt, the WGC's head of market intelligence, confirmed to the Reuters Global Gold Forum on Thursday there were "three structural factors prompting institutional investors to ... increase their exposure to gold," namely the "loosening of monetary policy" with negative interest rates, "fractious politics" such as Brexit and finally less rate hikes in the US and the "consequent slowdown of US Dollar strength."
At the Rio Olympics, Team GB have won so far four gold medals, the equivalent of 24g of pure gold, for almost £800 at today's spot prices, ranking 8th on Friday morning. Team USA ranked first as it collected 96g of pure gold shared between 16 gold medals for a value of more than $4,100.
BullionVault's infographic on Olympic medals and their metal value for the last 120 years tells more.