Gold prices tread water ahead of key U.S. data due later this week

NEW YORK (August 29) Gold prices traded marginally higher on Tuesday as traders set their sights on inflation and labor-market data due out of the U.S. later this week.

Price action

• Gold futures for December delivery GC00, -0.07% GCZ23, -0.07% gained 40 cents, or less than 0.1%, to $1,947 per ounce on Comex.
• Silver futures for September delivery SI00, -0.03% SIU23, -0.03% were marginally higher at $24.26 per ounce.
• October platinum PL00, +0.72% PLV23, +0.72% gained $9.50, or 1%, to $981 per ounce, while Palladium for December delivery PA00, -1.38% PAZ23, -0.82% fell by $5.40, or 0.4%, to $1,256.50 per ounce.
• Copper for December delivery HG00, +0.11% HGZ23, +0.30% gained 1 cent, or 0.4%, to $3.81 per pound.

Market drivers

Gold prices have benefited over the past week as Treasury yields have retreated from their highest levels in more than 15 years. The 10-year note yield BX:TMUBMUSD10Y touched its highest level since 2007 last week, according to FactSet data, when it traded just shy of 4.37%. It was trading at 4.220% early Tuesday.

Meanwhile, the U.S. dollar is holding steady just shy of its highest levels since March. The ICE U.S. Dollar Index DXY was trading at 104.10 early Tuesday, FactSet data show.

Commodity analysts attributed the yellow metal’s recent strength to last week’s commentary from Federal Reserve Chairman Jerome Powell, who sounded non-committal about the prospect of more interest-rate raises. Given the lack of clarity about where rates are headed, any short-term moves in the yellow metal’s price could be quickly reversed once investors have a better idea of what’s to come, a team at Commerzbank said.

“Against this backdrop, any major fluctuations in the gold price, in either direction, seem unlikely and indeed unjustified for the time being,” the team said.

Others are more optimistic. On Monday, a top strategist at Morgan Stanley said in a note to clients that she’s looking for opportunities to buy the yellow metal.

Later in the week, investors will receive the next batch of critical U.S. economic data that could influence the price of the yellow metal. On Thursday, investors will receive an update from the PCE Index, the Fed’s preferred inflation gauge, followed by the Department of Labor’s August jobs report on Friday.

MarketWatch