Gold near steady and loses overnight gains after solid U.S. GDP
NEW YORK (September 25) Gold prices are trading not far from unchanged in midday action Thursday. The yellow metal lost its overnight gains following a stronger-than-expected U.S. economic report. Silver prices are sharply up and hit another 14-year high. Some keener risk aversion in the general marketplace late this week is prompting some safe-haven demand for the precious metals. December gold was last down $2.60 at $3,765.50. December silver prices were up $0.858 at $45.05.
This morning’s revised second-quarter U.S. GDP report showed a better-than-expected rise of 3.8%, year-on-year, which was above the marketplace expectation for a 3.5% rise. The PCE inflation readings in the GDP report were also slightly higher than expected. The GDP report falls into the camp of the U.S. monetary policy hawks, and was a bit bearish for the precious metals.
Risk aversion is a bit elevated late this week amid worries about a U.S. government shutdown and the recent escalation in the Russia-Ukraine war. The White House budget office is telling U.S. federal agencies to prepare plans for mass firings during a possible U.S. government shutdown next week. Agencies have been directed to identify programs where discretionary funding is set to lapse and draft plans to permanently eliminate jobs in areas not aligned with the Trump administration's priorities. “The move is seen as an escalation beyond normal shutdown protocols, under which nonessential government workers are typically furloughed and eventually brought back with back pay,” said a Bloomberg report. Senate Minority Leader Chuck Schumer said in a statement the move was an “attempt at intimidation,” adding, “these unnecessary firings will either be overturned in court or the administration will end up hiring the workers back.” The termination memo was first reported by Politico.
The key outside markets today see the U.S. dollar index solidly higher after the upbeat GDP report, while crude oil prices are slightly near steady and trading around $65.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.2%.
KitcoNews
