Mild gains for gold, maintained the positive sign in the week

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Gold traded lower on Friday, as investors weighed in on data showing that US inflation was slowing.

Particularly, the Consumer Price Index (PCE)the measure that the US Federal Reserve considers the most informative of Consumer Prices, strengthened slightly by 0.2% in April compared to last month, marking the smallest monthly increase in the last year and a half.

In addition, on an annual basis, the pace of the structural measure of the index slowed to 4.9% from 5.2% last March, declining for the second consecutive month.

Characteristically, the last time that the structural PCE had experienced successive slowdowns was in the first months of 2020, when the coronavirus pandemic began to spread in the USA.

At the same time, consumer spending in the country moved at a rate that exceeded estimates, boosting optimism about the course of the economy in the second quarter amid fears of an impending recession due to rising interest rates. In particular, consumer spending rose 0.9% in April when analysts in a Bloomberg survey expected a smaller increase of 0.7%.

In addition, the growth rate of consumer spending in March was revised upwards from the already strong 1.1% initially announced, to 1.4%.

Investors, meanwhile, praised the bank officials’ determination to tame the extremely high inflation, as seen in the Fed minutes for the May meeting, even with higher interest rates than expected by the market if needed.

Minutes did not reveal much new stuff and gold movements this week “show that demand for the precious metal is subdued,” said Commerzbank analyst Daniel Briesemann in a note.

“Over the last two days, there have been outflows from gold ETFs again, which means that gold lacks a boost from financial investors,” he said.

“The upward momentum is weakening, as the risk-taking investment climate is shifting capital to more risky and higher-yielding assets,” said Ipek Ozkardeskaya, an analyst at Swissquote Bank.

The small fall of the dollar – below 0.1% – contributed to the gains of the precious metal.

So the gold delivery in June rose $ 3.70, or 0.2%, to $ 1,851.30 an ounce. In the week, gold added about 0.4%

The silver June delivery was up 0.7% at $ 22,096 an ounce, up 1.4% on the week.

As for the other metals, the contract for platinum gained 0.6% to $ 943 an ounce, while the palladium recorded a “jump” of 2.9% to $ 2,054.80 per ounce with its weekly earnings being around 5%.

Its price copper climbed 1.1% to close at $ 4.3065 a pound.

Source: Capital

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