Last week, optimism surrounding potential interest rate cuts propelled silver to an eleven-year high of $31.45, while gold notched a 3% weekly uptick. This week’s calendar of economic events was marked by Fed speaking engagements, along with Minutes from the Fed’s May FOMC meeting and jobless claims data which were set for release on Wednesday and Thursday, respectively.
Momentum for precious metals continued into Monday, when gold scaled a fresh all-time high of $2,449 and silver remained near an elven year high of $32.34. Demand for the pair was largely fueled by rate cut hopes, geopolitical tensions, and news of Chinese stimulus measures.
After a mixed close on Monday, U.S. stocks managed to end Tuesday’s trading in the green following better-than-expected earnings data from major retailers such as Macy’s and Lowes. Meanwhile, gold and silver saw little change following an address from Federal Reserve Governor Christopher Waller in which he stated, “In the absence of a significant weakening in the labor market, I need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy.”
On Wednesday, the S&P 500 and Nasdaq Composite slipped from their respective all-time highs of 5,340.26 and 16,832.63 as Fed speak and recently released Fed meeting minutes bolstered the “higher for longer” narrative surrounding interest rates. This, along with surging Treasury yields pressured gold 1.8% lower to a closing price of $2,372 on Wednesday. These developments also weighed on silver, as the gray metal ended Wednesday’s trading 3.8% lower at $30.52.
On Thursday, investors continued to digest hawkish comments from the previous day’s release of Fed meeting minutes which showed that multiple officials would be willing to raise interest rates if necessary. This news dampened the mood on Wall Street and caused the Dow to dip by more than 600 points, for its worst daily downturn this year.
Gold extended its decline for the third straight session on Thursday, amid rate cut pessimism and a surging dollar index. On the same day, S&P Global released a report which showed that U.S. business activity accelerated to its highest level in more than two years in May. This indicated that prices for goods could rise in the coming months. As a result, gold shed 1.5% on Thursday at a closing price of $2,337.
While major stock market averages managed to pare some of their weekly losses today, the Dow Jones Industrial Average and S&P 500 ended the week 2.3% and 0.1% lower, respectively. Meanwhile, the Nasdaq Composite reached a new record high today and notched a 1.4% weekly uptick.
Gold hovered near $2,334 today and would ultimately snap its three-week wining streak with a 4.2% weekly downturn. Silver also suffered from rate cut doubts and profit taking. As a result, the gray metal ended the week at $30.35, for a 6.1% weekly loss.
