Gold closed at its highest level since late June on Tuesday, a day ahead of the much-anticipated release of July US consumer price data, which is expected to provide insight into the Federal Reserve’s next steps on the battlefield. against inflation.
Today’s rise in the yellow metal was fueled by falling stocks and a sliding dollar that turned investors to the safety of gold.
Despite the weakness of recent months, after all, gold has had a remarkably good run after last Friday’s impressively strong US employment data.
The jobs report, naturally, fueled investor and analyst interest in July US Consumer Price Index data due tomorrow, which is expected to provide some indication of the Fed’s next moves on is about its effort to rein in inflation that remains at four-decade highs.
“Gold is gaining ground today thanks to safe-haven flows due to lower equities and a weaker dollar,” Edward Moya, senior market analyst at Oanda, said in a note to clients, where he is also proceeding with a positive forecast for the course of the precious metal. “If inflation eases a little more than expected, gold could move towards the $1,850 area,” the Oanda analyst estimated.
CPI data due tomorrow is expected to show, however, a slight decline from June’s beastly 9.1% year-on-year rate, in part due to the recent drop in gas station prices.
Amid that climate, gold continued its rally over the past month, limiting its year-to-date losses to just 3% for the most active contract, according to FactSet data.
Specifically, on Tuesday, the December delivery contract for gold gained $7.10, or 0.4%, and ended the day at $1,812.30 an ounce. That was the highest close for the precious metal’s most active contract since June 29, according to FactSet data.
However, the rest of the metals did not follow the course of gold today. Specifically, the September silver contract fell 13 cents, or 0.6%, to end the day at $20.48 an ounce.
Palladium followed suit, with the September contract down $22.70, or 1%, to settle at $2,218.80 an ounce, as was platinum, with the October contract down $5.40, or 0. 6% and end at 933 dollars per ounce.
Finally, the September copper contract closed almost unchanged at $3.587 a pound.
Source: Capital
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