Silver Passes $30 as Gold Notches a Weekly Gain
Last week, gold managed to snap a two-week losing streak amid rate cut optimism. This week’s calendar of economic events was chalked full of Fed speaking engagements, with special focus being given to inflation data due out on Tuesday and Wednesday.
After a winning week, stocks in the U.S. were mixed on Monday, as investors anticipated Tuesday’s release of wholesale inflation data. Gold and silver started the week at $2,353 and $28.13, respectively. The “higher for longer” narrative surrounding interest rates exerted some selling pressure on gold Monday, but the yellow metal would end the day only slightly lower at $2,342 an ounce.
Tuesday’s wholesale inflation data revealed that the U.S. producer price index climbed 0.5% in April when a smaller increase of 0.3% had been forecasted by economists polled by the Wall Street Journal. Despite the hotter inflation reading, the Nasdaq Composite posted its 7th record close of 2024, while the Dow Jones Industrial Average and S&P 500 also managed to end the day in the green.
While higher inflation readings in recent months have resulted in near-term selling pressure for precious metals, both gold and silver were buoyed by safe haven inflows on Tuesday, as news surfaced that Israeli forces advanced deeper in the Rafah. As a result, gold ended the day slightly higher at $2,359 while silver advanced to $28.59.
Investors digested core CPI data on Wednesday, which showed that prices rose again in April, but at a slower rate than what had been forecasted. The so-called core rate of inflation which excludes food and energy prices, rose 0.3% against forecasts calling for a 0.4% rise. The cooler-than-expected inflation data supported hopes from monetary policy doves, who favor interest rate cuts and subsequently bolstered gold prices. By the end of Wednesday’s trading, gold had surged 1.3% to $2,390, while silver saw little change at $28.65.
Despite recent inflation news, gold edged 0.4% lower on Thursday, as the dollar index bounced. Meanwhile, silver settled near a three-year high of $29.65. Stocks continued to climb higher today, as the Dow closed at 40,000 for the first time in history. This week’s positive inflation news also propelled the Nasdaq and S&P 500 to weekly gains and their longest winning streak since February.
Silver continued its historic run this morning by notching an 11.7% weekly gain on its way to a 10-year high of $31.43. Meanwhile, gold gained 2.6% this week, at $2,414 as U.S. rate cut bets continued to provide momentum for precious metals.