Precious Metals Eye Weekly Losses Amid Positive Economic Data
Last week, gold fell by almost 2% while silver dropped by over 6% as the prospect of further rate hikes in the U.S. weighed heavily on the pair. This week investors looked to jobless claims, inflation data, and developments in the housing market for clues as to the Fed’s next move.Gold saw little change on Monday at $1,928 an ounce, while silver gained 1% but would fail to breach the $23 mark. On the same day, U.S. equities fell as the Dow Jones Industrial Average dipped for the sixth straight session.On Tuesday, investors were greeted with a bevy of economic news releases, which showed that new home sales in the U.S. jumped to 763,000 in May, when 675,000 was expected. Additionally, U.S. durable goods orders rose unexpectedly while the U.S. consumer confidence index was at nearly a 2-year high of 109.7.The positive economic news allowed U.S. stocks to snap their respective losing streaks, and bolstered expectations that the Fed would raise interest rates further in 2023. This sentiment drove gold to a 3-month low of $1,914 on Tuesday.On Wednesday, Fed Chair Jerome Powell met with the top central bankers from The Bank of England, Japan, and the European Central Bank. Collectively, the group supported higher interest rates and agreed that the fight against inflation was far from over. Following the meeting Powell stated that, “the bottom line is that policy hasn’t been restrictive enough for long enough.”U.S. equities were mixed after the Fed Chair’s hawkish comments, while Gold languished near a 3-month low of $1,913. On Thursday, news broke that pending home sales in the U.S. fell more than expected in May, to a 5-month low. Meanwhile, positive news came from the employment front, with weekly jobless claims falling to a 1-month low of 239,000.The upbeat economic data would push gold below the key psychological level of $1,900 on Thursday, as silver touched its own weekly low of $22.31. More positive news came this morning, as the personal consumption expenditures price index rose less than what was forecasted in May. The core PCE index is 4.6% higher than one year ago, when 4.7% was predicted.The better-than-expected inflation data allowed gold to regain some ground this morning. However, the yellow metal is eyeing its first quarterly decline in three, and a 0.5% weekly downturn at $1,919 an ounce. Silver is currently at $22.76 which is modestly higher for the week and if maintained, would end its 2-week losing streak.This week’s positive economic news seemingly negated worry over impending rate hikes, as major stock market averages are on track for weekly gains. As this is written, The Dow Jones Industrial Average is 2.1% higher, while the Nasdaq Composite and S&P 500 are both nearly 2.5% higher for the week.