Gold and Silver See Modest Losses Following Inflation and GDP News


Precious metals price momentum in recent weeks has been plagued by dollar strength, rate hike worries, and surging Treasury yields. It’s widely expected that Fed policymakers will opt for a fourth consecutive straight rate hike of 75 basis-points at next-week’s meeting.  With little question over the Fed’s next moves, precious metal price movements for this week were largely correlated with movements in the dollar index and Treasury yields. 

Investors remain keenly focused on news and economic data that provide clues into the health of the U.S. economy. There was no shortage of economic data throughout this week with inflation data, home sales news, jobless data, corporate earnings, and more sprinkled throughout the week.

Stocks rallied for their third straight session on Tuesday, while data from S&P Case-Shiller revealed that home prices are still higher than in 2021, but price gains slowed at the fastest pace on record, in August. Slowdowns in the housing sector have been widely attributed to rising interest rates. 

The Wall Street rally ended on Wednesday as disappointing earnings news from Alphabet and Microsoft weighed on the tech-heavy Nasdaq, causing the index to fall by just over 2%. Investors were also faced with gloomier housing data from the Commerce Department, which showed a nearly 11% decrease in new home sales for September. 

Treasury yields also fell following the housing news, which paved the way for higher gold and silver at $1,665 and $19.53. Wall Street sentiment improved slightly on Thursday, following reports showing U.S. gross domestic product growth of 2.6% in the third quarter, versus Dow Jones forecasts of 2.3%. 

Investors were faced with another round of inflation data today, which showed that prices in the U.S. are still rising. The core personal consumption expenditures price index, which excludes food and energy, increased by 0.5%, which was in line with estimates.

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