Gold Trades in $10 Range, Hits 6-Week Euro Low Ahead of Key US Data

GOLD PRICES steadied in a narrow $10 range against a weaker US Dollar on Monday as investors, traders and analysts looked ahead to key GDP, jobs and inflation data before next week's US Fed and European Central Bank interest-rate decisions, writes Atsuko Whitehouse at BullionVault.

 

While the Federal Reserve is now certain to raise its overnight target rate by 0.25 percentage points on 3rd May according to betting on the CME's futures market, this week brings US consumer confidence data on Tuesday, first quarter GDP growth plus the latest weekly jobless benefit claims on Thursday, and then the PCE cost of living index on Friday – the Federal Reserve's favoured gauge of inflation.

 

With gold trading 3.1% below mid-April's 13-month peak in Dollar terms, the spot market today moved barely $5 above or below $1984 per ounce.

 

The UK gold price in Pounds per ounce meantime slipped to £1594, down 3.4% from the new all-time high of 5 weeks ago, while wholesale bullion for Euro investors flirted with 6-week lows after falling through €1800 amid growing expectations that the ECB will continue to raise interest rates for the 19-nation Eurozone while the US Fed pauses and then starts to reverse its steep hikes of the last 13 months.

 

The Dollar index – a measure of the US currency's value versus its major peers – fell to a 6-session low, trading unchanged from this time last year and erasing the last of summer 2022's 13% surge to 2-decade highs.

 

Some professional investors see the Dollar sliding even further according to a recent survey by Bloomberg, because the market has "underpriced" the extent of the Fed rate cutting which they believe will follow next week's rise.

 

The US central bank raised its policy rate by 75 basis points at four consecutive meetings in 2022 before slowing its rate hikes to half-a-percentage point in November and then a quarter-point in each of February and March. 

 

"Peak Fed rates, when confirmed, have historically on the three previous occasions during the past 20 years supported strong gains in gold in the months and quarters that followed," says derivatives platform Saxo Bank's commodity strategist Ole Hansen, explaining his longer-term bullish outlook for precious metals.

 

The price of silver, which finds nearly 60% of its annual demand from industrial uses, meanwhile recovered an earlier loss of over 1% and steadied at $25.11 per ounce having fallen last week to reduce its monthly advance to 5% so far in April. 

 

Platinum in contrast surged by 7.7% last week, taking its April gains to more than 15% today despite a $30 pullback from Friday's 13-month high of $1134 per ounce

 

Platinum's industrial uses account for two-thirds of its demand, led by auto-catalysts in diesel engines and with demand for green-energy hydrogen fuel cells now also rising.