Gold Snaps its Losing Streak While Silver Outperforms
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Last week, Gold and silver saw a divergence as Treasury yields neared record highs. Ultimately, gold fell for the fifth straight week, while silver secured a modest weekly gain. There were few scheduled events on the economic calendar this week outside of the Fed’s Jackson Hole Symposium, which was set to begin on Thursday.
Gold started the week near a 5-month low of $1,890, while silver started the week at $22.75. On Monday, the 10-year Treasury yield continued to march higher, which kept non-yielding gold below $1,900. However, silver managed to gain 3% on Monday while the dollar slid by 0.2%.
On Tuesday, the 10-year Treasury yield remained near a 15-year high of 4.33%. Gold managed to breach $1,900 on the same day, but gains would be limited as the dollar index rose by 0.2%. Meanwhile, investor focus remained on record high Treasury yields and the upcoming Jackson Hole Symposium.
Gold and silver would touch their weekly peaks on Wednesday, as the dollar and bond yields pulled back. On Wednesday, gold gained 1%, to a closing price of $1,921. On the same day, silver surged by nearly 4% to a 3-week high of $24.36. Additionally, precious metals enjoyed some safe-haven inflows following some disappointing economic news from the U.S. On Wednesday, the S&P U.S.manufacturing index fell to 47 from 50, while the S&P Global flash U.S. services sector index dipped to its own 6-month low of 51.
On Thursday, data was released that showed U.S. jobless claims came in slightly lower than expected at 230,000, when 240,000 was predicted. For many, this increased the odds that the Fed will keep interest rates higher for longer. Yields and the dollar both saw an uptick following this news. Despite this, gold saw little change as investors were looking ahead to Fed Chair Jerome Powell’s speech at Jackson Hole, which was scheduled for Friday morning.
Powell addressed media members this morning at Jackson Hole and noted that while inflation had fallen in recent weeks, higher interest rates may be needed to bring consumer prices back below the Fed’s target of 2%. The more hawkish tones dented gold appeal, causing the yellow metal to fall by 0.5%. Stocks in the U.S. shrugged off the prospect of higher rates, while the 10-year Treasury rose by 3 basis points.
Stocks in the U.S. had a mixed week. The Nasdaq Composite led gains for major averages, with a 1.8% weekly uptick, following a solid earnings report from chipmaker Nvidia. Meanwhile, the S&P 500 snapped its 3-week losing streak with a 0.6% weekly gain. Despite Friday gains, the Dow Jones Industrial Average ended the week 0.5% lower.
Gold ended the week 1.3% higher, at $1,914, which marked the end of the yellow metals’ 5-week losing streak. Silver once again outperformed gold, with a 6.5% weekly gain at $24.22 an ounce. There’s no shortage of scheduled economic events next week, with GDP data due out on Wednesday, followed by inflation news on Thursday, and U.S. nonfarm payrolls on Friday. Investors will closely monitor each of these for clues as to the Fed’s next move.
