[ad_1]
Gold futures on Thursday posted their first loss in six sessions, but ended higher for the week with precious metal continuing to find support a hedge against inflation.
“It’s clear that gold has headwinds from the dollar and yields,” said Ross Norman, chief executive officer at Metals Daily. “Add to that the lockdown in Shanghai and [Hong Kong] and it’s surprising its doing so well.”
Still “tailwinds in the form of high inflation are, of course, well covered,” he said. “What is most encouraging is institutional investing in North America through the [exchange-traded fund] has been off the scale.”
Inflows into global gold ETFs totaled 269 metric tons, valued at $17 billion in the first quarter — the highest quarterly total since the third quarter of 2020, the World Gold Council reported earlier this month.
On Thursday, gold for June delivery
GC00,
GCM22,
fell $9.80, or 0.5%, to settle at $1,974.90 an ounce, after logging its fifth straight gain Wednesday to post its highest close since March 11. May silver
SIK22,
lost 33 cents, or 1.3%, at $25.70, after also ending at its highest since March 11 on Wednesday.
Regular trading for Comex metals futures will be closed for Good Friday. For the week, gold based on the most-active contract settled 1.5% higher and silver climbed by 3.5%, according to Dow Jones Market Data.
“In addition to a modest overbought technical condition, the precious metal markets are being buffeted by a rising chorus of central bank rate hike threats,” analysts at Zaner wrote in a daily market update.
An aggressive half percentage point interest rate hike in May is a “reasonable option” for U.S. central bankers, said New York Federal Reserve President John Williams on Thursday.
Meanwhile, the Bank of Canada raised its policy rate by a half-point to 1% on Wednesday. Separately, the European Central Bank Thursday said it expected to end net asset buys under its Asset Purchase program in the third quarter.
Still, analysts at Zaner said they were “becoming convinced that this week’s initial gains in gold and silver prices were the result of bonafide inflation hedge buying.” In fact, “gold and silver prices managed to rally despite a series of contract highs in the dollar and a general market discounting” of a jump in U.S. producer prices last month, they said.
The cost of wholesale goods and services jumped 1.4% in March and Over the past year, wholesale prices have climbed 11.2%, U.S. government said Wednesday.
Looking ahead, the outlook for gold is still bullish and “the level to beat for futures to begin a new leg in the current uptrend is the 2022 high close of $2,058” an ounce, analysts at Sevens Report Research wrote in Thursday’s newsletter. “To the downside there is formidable support between $1,920 and $1,940 that would only likely be broken if there was a substantial spike in real interest rates.”
Overall, gold has been buoyed by haven-related flows as the Russia-Ukraine war appears set to drag on. Hot inflation readings in the U.S. and Europe have also underpinned the metal, though some analysts and economists see signs that price pressures may finally be peaking after U.S. data showed consumer inflation ran at its hottest since 1981 in March.
On Thursday, U.S. data showed a bigger-than-expected rise in weekly jobless claims of 18,000 to 185,000. Sales at U.S. retailers rose a mild 0.5% in March and the cost of imported goods such as oil and food rose a sharp 2.6% in March. The University of Michigan’s gauge of consumer sentiment in April, meanwhile, rose to 65.7 from March’s reading of 59.4.
In other Comex dealings, May copper
HGK22,
rose 0.2% to $4.724 a pound, a fraction of a cent lower for the week. July platinum
PLN22,
added 0.5% to $994.20 an ounce, up 1.9% higher for the week. June palladium
PAM22,
added 0.7% to $2,355.40 an ounce, but down 2.7% for the week.
[ad_2]
Source link
