Gold Falls 5th Week Running as AI Tech Spending Surges

GOLD PRICES failed to rally on Friday, making the lowest week-end finish in Dollar terms since the end of July as long-term interest rates held new multi-decade highs and US data pointed to further strength in the world's largest economy, led by AI investment.

Falling for the 5th week in a row at London's 3pm bullion auction, the price of gold dropped 1.8% from last Friday to fix around $4268 per troy ounce.

The price of silver also reversed an earlier bounce, extending a 3.0% week-on-week drop at its midday London auction to 5.3% in mid-afternoon spot market trade beneath $63.50.

The Nasdaq 100 index of US tech stocks in contrast showed a 2.9% gain from last Friday, albeit trading below Tuesday's fresh all-time high.

After yesterday's new home sales and jobless benefit claims data pointed to continued US economic growth, today's Durable Goods Orders numbers for August showed unexpected strength.

In particular, the monthly value of manufacturers' new orders for non-defense capital goods excluding aircraft rose14.1% compared to August last year, signaling "robust growth in business spending on equipment amid an artificial intelligence infrastructure buildout," says Reuters, with the sharpest growth since 2021's post-Covid-lockdowns re-opening.

Western government borrowing costs rose again, with 10-year US Treasury bond yields edging above 5.20% per annum, the highest since June 2007, eve of the global financial crisis.

With London bullion now reversing half of August's dramatic gold price jump, leading gold-backed ETF trust fund the GLD and IAU both headed for a small weekly outflow of investor cash today after the gold ETF sector set a new record size last Friday as a whole.

The Dollar slipped on its trade-weighted DXY index, but still showed a weekly rise against the Western world's other major currencies of 0.7%.

Gold priced in Euros fell to €3742 per troy ounce at London's 3pm auction, and the UK gold price fixed around £3220, also its lowest Friday finish in the bullion market's central trading and storage hub since early August.

With US President Trump last night welcoming China's President Xi with a state banquet at the White House, Iran today said it's proposed a 7-day plan to Washington for re-opening the key Strait of Hormuz to oil tanker traffic.

Army chiefs from Turkey and Pakistan meantime flew to Riyadh as Saudi Arabia continued to battle Iran-backed Houthi rebels across the Strait of Bab al-Mandeb in Yemen.

Crude oil today eased back, taking Brent November futures down toward $105 per barrel for a 1.6% weekly rise.