Gold and Silver Snap Weekly Losing Streaks
Last week, gold and silver posted their third consecutive week of losses as hawkish Fed speak and dollar momentum pressured the pair to the downside. Debt ceiling concerns drove investor sentiment throughout this week. Markets were also affected by scheduled events, such as the release of Fed Beige Book data, and various U.S. economic data releases.
It was a shortened trading week in the U.S., as major markets were closed on Monday in observance of the Memorial Day Holiday. Gold started the trading week on Tuesday at $1,938 an ounce, and silver at $22.93. Gold slid to a two-month low near $1,931 on the same day, as news that President Biden and House Majority Leader McCarthy had arrived at a debt ceiling deal.
However, gold recovered to $1,965 and a 1.4% daily uptick as the dollar and Treasury yields both slid lower on Tuesday. U.S. equities were mostly higher on the same day, as debt ceiling optimism permeated Wall Street. The Fed’s Beige Book, which is a collection of anecdotes and economic data, was released on Wednesday.
2023’s fourth iteration of the Beige Book showed that Fed governors across the country observed persistent price increases, but an overall slowing of the rate of inflation. Various districts also reported a slowdown in hiring. Most districts described financial conditions as “stable or somewhat tighter.”
Gold and silver rose on Wednesday as Treasury yields declined. Gold ended the day with modest gains but would end the month 0.9% lower at $1,965 an ounce. This marked gold’s first monthly dip in three, as dollar gains weighed on the yellow metal throughout May. Silver also gained on Wednesday but ended the month 6.2% lower at $23.52.
Gold scaled a one-week high of $1,980 on Thursday, as weaker U.S. economic data seemingly upped the likelihood of a rate hike pause at the Fed’s June 13-14th policy meeting. Precious metals were also aided by a dip in Treasury yields and the dollar index, following news that U.S. manufacturing activity saw its seventh consecutive month of declines. Meanwhile, silver managed to breach $24 on Thursday, for the first time in nearly three weeks.
This morning, news broke that the U.S. added 339,000 jobs in May, when 190,000 was forecasted. Stocks in the U.S. soared following the employment news. The Dow Jones Industrial Average gained the most at 2.2%, as all three major averages are on track for solid weekly gains.
Following this morning’s positive employment news, Treasury yields broke higher, which pressured gold 1.2% lower and silver back below the $24 level. However, persistent rate hike optimism supported the pair for what will likely be weekly gains.
Despite this morning’s losses, gold is currently eyeing a 0.6% weekly uptick at $1,951 an ounce. If maintained, this will end gold’s three-week losing streak. Silver is currently at $23.64, which is 1.6% higher for this week.