Address

Precise Investors

Alternative Investments

Gold set for second weekly gain on US rate cut hopes

Gold prices

Spot gold was 0.2% higher at $2,363.06 per ounce, after reaching a two-week high earlier in the session

Gold prices were set to post a second successive weekly gain on Friday as recent softer U.S. economic data kept traders optimistic for interest rate reductions later this year, with other precious metals also heading for a weekly gain.

Spot gold was 0.2% higher at $2,363.06 per ounce, as of 0953 GMT, after reaching a two-week high earlier in the session.

Bullion has advanced more than 1% so far in the week, adding to the 1.7% rise last week.

U.S. gold futures gained 0.3% to $2,376.70 on the day.

There has been some softness coming through the economic data from the U.S. this week, like yesterday’s housing data pointed towards a slowdown with high interest rates having a negative impact on activity there, according to Ole Hansen, head of commodity strategy at Saxo Bank.

Data on Thursday showed first-time applications for U.S. unemployment benefits dropped moderately last week, while new housing construction declined. This, along with weak retail sales last month, keeps the probability of a September rate cut on the table.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Meanwhile, China’s yuan dropped to a new seven-month low against the dollar.

The soft Chinese renminbi is also one of the reasons why investors in general in China have been falling over gold in recent months, apart from obviously the concerns about the property sector, Hansen added.

The market’s next focus is on the U.S. flash purchasing managers’ indexes (PMI) due at 1345 GMT.

Spot silver dropped 1.1% to $30.37 per ounce, but following gold’s trajectory, it was also 3% higher so far for the week.

Wherever gold goes, silver goes, but faster, Hansen added.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Precise Investors. The information provided on Precise Investors is intended for informational purposes only. Precise Investors is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

Leave a Reply