The gold price was fairly unchanged on Friday morning after it peaked at its highest in three months on Thursday.
Spot gold was last at $1,219.20/1,1220.00 per ounce, down $1.70 on the previous session’s close. It hit its highest since February 17 on Thursday at $1,227.10.
Silver also hit a three-month high on Thursday at $17.58 and has followed gold slightly lower this morning to $17.38/17.43 per ounce, down seven cents.
“Bullion prices have put in three strong days, taking gold above $1,225 and silver above $17.40, but prices are now consolidating. We should get a feel for how much sentiment has changed by seeing how well prices now hold up,” FastMarkets analyst William Adams said.
While the markets have been fairly quiet this morning, there is speculation that Shanghai dealers might cash in on the higher prices.
Pressure on gold has emanated from a dollar that is starting to claw back some of the losses it made yesterday when it hit its lowest against the euro since February – it was last at 1.1393.
Weaker-than-expected US retail sales for April and a forecast-missing PPI figure on Thursday drove the dollar’s losses and gave the yellow metal the impetus to move higher.
Sluggish demand at the start of the second quarter will exacerbate fears that what was thought to be a temporary slowdown in the US economy in the first quarter may well stretch into the second and ultimately stay the Fed’s hand when it comes to the normalisation of monetary policy.
“[The data] fuels expectations that the Fed will not only stand pat in June, but might even pass on raising rates in September, particularly if the economy does not show signs of improvement,” INTL FCStone’s Ed Meir said in a note.
But Friday sees the release of the Empire State manufacturing index, industrial production, capacity utilisation and consumer sentiment numbers, which will used to determine whether or not the perceived slowdown has continued into the second quarter.
Should consumer sentiment figures in particular reflect the downturn in retail sales data earlier in the week, gold might once again push back towards three-month highs should the dollar bear the brunt.
In data already released today, Chinese foreign direct investment was 10.4 percent and Japanese consumer confidence slipped to 41.5.
In the PGMs, platinum continued higher but fell short of Thursday’s near-one-month high of $1,166 – it was last up $2 at $1,156/1,161 per ounce. Palladium was last $3 higher at $781/786.
Impala Platinum, one of the world’s largest platinum producers, has said that continued South Africa electricity supply issues may hit its production targets.
The company reported gross refined production of 301,000 ounces of platinum first three months of the year, up 47 percent year on year, although operations in the year-ago figure were affected by industrial action.
(Editing by Mark Shaw)
The post Gold moves off 3-mth high but US data may lead to more upside appeared first on The Bullion Desk.
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