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Gold futures rebounded Friday from sharp losses in the previous session, as U.S. Treasury yields fell on optimism for a Federal Reserve rate cut in September after data showed U.S. prices rose modestly in June.
Fed policymakers received fresh evidence of progress in the fight against inflation, as the personal consumption expenditures price index nudged up just 0.1% in June after staying unchanged in May, and core PCE inflation rose 2.6% in the 12 months through June, matching May’s rise.
The news sent yields on the benchmark 10-year Treasury to a one-week low.
“Today’s mixed-to-weaker U.S. data suggests inflationary pressures and economic activity are waning, paving the way for the Fed to cut rates twice this year,” Forex.com analyst Fawad Razaqzada said, according to Reuters.
Front-month Comex gold (XAUUSD:CUR) for July delivery gained 1.2% on Friday after tumbling to its lowest since July 9 on Thursday, but settled -0.6% for the week to $2,380.00/oz this week.
Front-month July Comex silver (XAGUSD:CUR) closed the week -4.2% to $27.86/oz after eking out a 0.2% gain on Friday.
ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), (OUNZ), (SLV), (PSLV), (SIVR), (SIL), (SILJ)
A larger pullback for gold prices in the coming weeks looks unlikely, and pullbacks “continue to show how strong the market is with buyers stepping in,” as seen on Friday, GoldSeek.com and SilverSeek.com founder Peter Spina told MarketWatch.
India, the world’s second largest gold market, announced this week a “massive” reduction in import duties for both gold and silver to 6% from 15%.
Combined with an increase in capital gains taxes for certain financial products, the move is a “big boost to India’s huge gold and silver appetite, [which] will likely spur more physical demand and help support gold and silver prices,” Spina said.
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