Gold News

Gold dips to close Friday shy of $650; US inflation data "tame"

From Chris Mullen of GoldSeek...

Gold traded slightly lower in Asia on Friday before it moved back higher in London and traded on either side of $650 to register a $4 gain in early New York trade.

Spot gold prices then fell from their high near $652 later in the afternoon and ended at the low of the session with a loss of 0.06%. In the week to last Tuesday, says the Commitment of Traders report, open interest in US gold futures and options shrank by around 1%. The market remains nearly 90% bullish.

Silver climbed over $12.50 by late trade in London on Friday and remained near that level for most of trade in New York, but it also fell back off in the last minutes of trade and ended near its low with a loss of 0.49%.

For European investors wanting to buy gold today, the Euro price of gold fell to about €480, platinum gained $1 to $1,275, palladium lost $1 to $365, and copper rose slightly to about $3.49.

US gold and silver equities rose over 1% at the Wall Street open and remained near their highs for most of the day until some weakness in the last hour of trade. They still ended with near 1% gains.

In the economy, personal income data showed a rise of 0.4% in May from April versus 0.6% expected. Persona spending also rose slower than anticipated at 0.5% against 0.7% forecast. Core inflation registered a 0.1% gain for the month according to the official data. Construction spending leapt 0.9% from April’s 0.2% rise. The Chicago PMI index dipped in June from May, but was higher than analyst forecasts.

Next week’s economic highlights include the ISM Index on Monday, US Factory Orders and Pending Home Sales on Tuesday, Initial Jobless Claims and ISM Services on Thursday, and June’s jobs data on Friday.

In the broader markets, US crude oil rose back above $70 per barrel and closed at a 10-month high on continuing supply worries in the face of strong demand. Geopolitical worries were also raised with the discovery of at least one unexploded car bomb in London.

The US Dollar index fell and US Treasury bond prices rose after year-over-year Core PCE came in at 1.9% and dropped below 2% into the Fed’s comfort range for the cost of living – the first time since February 2006.

The Dow, Nasdaq, and S&P opened nicely higher on that tame inflation and strong economic data, but they fell off markedly in afternoon trade on worries over subprime mortgages and their potential impacts on the rest of the market. All three indices rebounded to find just slight losses by the close in volatile fashion ahead of the short trading week ahead. Weds 4 July will see the US markets closed for Independence Day.

Canadian markets will be closed on Monday in observance of Canada Day. Among the big names making news in the stock market Friday were Delphi, Apple, RIM, Commerce Bancorp, and S&P, Moody’s, and Fitch.

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum 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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