Gold and Silver Diverge Amid Upbeat Economic Data

Last week, gold snapped its three-week losing streak with a 1.6% uptick, as rate cut optimism boosted the yellow metal’s appeal. This week was shortened in terms of trading days as major markets were closed on Wednesday in observance of the Juneteenth Holiday. Throughout this week, investors were keenly focused on U.S. employment and economic data for clues as to when the Federal Reserve may cut interest rates.

Gold saw little change on Monday and would hover around the $2,323 mark as news surfaced that the Chinese central bank had halted gold purchases for the first time in eighteen months. Elsewhere, stocks surged on Monday, amid optimism among investors regarding potential slowdowns in inflation. Most notably, the S&P 500 reached a record high in the fifth session out of six.

The S&P 500 jumped again on Tuesday as shares of Nvidia surged, while the chipmaker and A.I. pioneer dethroned Microsoft for the most valuable publicly traded company on Wall Street. Meanwhile, gold bounced from a two-week low and would end Tuesday’s trading near $2,329 an ounce. Silver saw little change during Tuesday’s trading and would end the day at $29.41.

Gold’s momentum continued into Thursday following the release of data that revealed U.S. housing starts fell short of Wall Street expectations to a four-year low. On the same day, the Labor Department released jobless claims data which painted the picture of a slowing job market. The data showed that the number of Americans who applied for unemployment benefits remained near a 10-month high of 238,000 when 235,000 had been predicted by economists.

The downbeat employment and housing data caused some to believe that multiple rate cuts were still on the table in 2024, despite the recent hawkish rhetoric coming from the Federal Reserve. This sentiment drove gold to a two-week high of $2,362 on Thursday. In a similar move, silver jumped over 3% to a closing price of $30.62.

This morning, investors were greeted with upbeat U.S. economic data via S&P flash U.S. services and manufacturing surveys. The surveys revealed that manufacturing PMI rose to 51.7 in June while the U.S. services index rose to a two-year high of 55.1. Both readings beat expectations, which boosted bond yields and the dollar.

These developments pressured gold 1% lower this morning. As a result, gold is on track for a slight weekly downturn, at $2,319 an ounce. Silver also tumbled following today’s economic news but is 0.9% higher for the week at $29.50.

After surpassing 5,500 in intraday trading on Thursday, the S&P ended today’s session lower but managed to secure a 0.74% weekly uptick. Meanwhile, the Nasdaq Composite also dipped today, but is 0.38% higher on the week, while the Dow Jones Industrial Average secured the most significant weekly gain at 1.63%.