Gold futures reached their highest level in three weeks early Wednesday as traders eagerly awaited new data on the U.S. labor market. The recent surge in gold prices comes as investors hope the Federal Reserve will refrain from implementing further interest rate hikes.
Price Action
- Gold futures for December delivery (GC00, +0.13% GCZ23, +0.13%) increased by $1.30, or 0.1%, to $1,966.40 per ounce. This marks the highest settlement level in three weeks.
- Silver futures for December delivery (SI00, -0.33% SIZ23, -0.33%) experienced a slight decline of 14 cents, or 0.6%, reaching $25 per ounce.
- October platinum (PL00, +0.57% PLV23, +0.57%) saw a gain of $5.60, or 0.6%, reaching $991 per ounce. However, palladium for December delivery (PA00, -1.29% PAZ23, -1.29%) fell by $16.20, or 1.3%, to $1,241 per ounce.
- Copper for December delivery (HG00, -0.26% HGZ23, -0.26%) experienced a decrease of 1 cent, or 0.4%, settling at $3.83 per pound.
Market Drivers
The recent uptick in gold prices can be attributed to weaker-than-expected U.S. economic data, which has raised investor confidence that the Federal Reserve will not pursue further interest rate hikes.
On Tuesday, stocks and gold were boosted by a batch of softer-than-expected U.S. job openings and consumer confidence data. Last week, weak PMI survey data from the U.S. and Europe also supported the belief that the U.S. economy might finally be slowing down, despite the Atlanta Fed’s GDP NowCast predicting a nearly 6% expansion for the third quarter.
While gold has remained steady above $1,900 with minimal volatility at the start of the week, Carlo Alberto De Casa, a market analyst at Kinesis Money, notes that the outlook has changed. The release of significant macroeconomic figures this week, including the underperforming Job Openings and Labor Turnover and consumer confidence data, has further improved the outlook for gold.
Moving forward, the trajectory of gold’s rebound will depend heavily on the tone of upcoming U.S. economic data set to be released later this week. Notably, Thursday’s PCE inflation data for July and the August employment report will play a crucial role in shaping market trends.
