Gold News

Gold Price Rebounds as US Inflation Rises with Jobless Claims

GOLD PRICES rebounded Thursday, erasing the week's previous 1.2% drop against the Dollar as new US data said the world's largest economy is seeing stronger inflation, weaker demand and a weakening labour market.
New claims for jobless benefits slipped last week, the Department of Labor said, but continuing claims rose sharply mid-month, reaching the highest level since November 2021.
US interest-rate expectations edged lower on that news despite higher inflation on first-quarter GDP data ahead of Friday's PCE reading for May, coming amid worsening supply-chain delays and bottlenecks worldwide.
Western stock markets rallied together with bond prices, nudging longer-term borrowing costs down from 2-week highs.
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The US Dollar also fell back, slipping from yesterday's 2-month highs against the rest of the world's major currencies on the FX market.
Gold meantime shot to $2322 per Troy ounce, rallying hard after Wednesday's Dollar strength had seen the precious metal record its first London 3pm benchmark price below $2300 per Troy ounce since Friday 3rd May.
Chart of the gold price in US Dollars. Source: BullionVault
Like the gold price, silver rallied sharply today after fixing at noon in London around Wednesday's 12pm level of $28.84 – a 6-week low – and jumping through $29 per Troy ounce to erase half of this week's previous 3.2% drop.
Today's new US data said gross domestic product grew at a 1.4% annualized pace in January-to-March, 0.1 points faster than the initial estimate for Q1.
But inflation on the PCE measure was also revised higher, up to 3.7% on the 'core' reading which excludes fuel and food and which Wall Street analysts expect to set a new 3-year low at 2.6% per year on tomorrow's monthly figure for May.
The USA's trade deficit in goods swelled in contrast, totalling more than $100 billion for the first time since America's record deficits with the rest of the world's exporters of early 2022.
Yet excluding autos, durable goods orders in the US economy fell last month on separate data today – defying analyst forecasts – while wholesale inventories rose sharply, also indicating weaker demand.
Following this week's "higher for longer" comments from US central bank officials, "Gold prices remain tangled in a tug of war between a less-dovish Fed and high levels of geopolitical tension," reckoned analysts at consultancy BMI in a note overnight.
Ukraine's President Zelenskyy yesterday visited front-line troops under increasing pressure from Russia's latest attacks in the country's eastern regions.
Washington today advised US citizens to avoid travelling to Lebanon, where local reports say Israeli forces – now 258 days into their invasion of Gaza over Hamas' 7th October atrocities – have struck the southern village of Aitaroun.
Crude oil prices rose further ahead of tomorrow's US PCE data, nearing 2-month highs, but copper fell back to new 2-month lows, down more than 15% from May's new record peak.
Gold priced in the Euro also rallied back to last weekend's level, trading at €2166 per Troy ounce ahead of Sunday's first-round voting in France's snap parliamentary election.
The UK gold price in Pounds per ounce also recovered this week's prior drop, back at £1834 with 7 days to go until the UK's own snap election.

Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver, platinum and palladium market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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