Gold prices finish higher as traders await Fed decision – MarketWatch
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Metals Stocks
Last Updated: July 25, 2023 at 2:09 p.m. ET First Published: July 25, 2023 at 7:09 a.m. ET
Silver futures settle higher after Monday’s more than 1% loss
Joel Saget/Agence France-Presse/Getty Images
[]Gold futures finished higher on Tuesday, recouping some of the losses that pulled prices in the previous session to their lowest in a week, ahead of Wednesday’s Federal Reserve interest rate decision.
[]The European Central Bank and Bank of Japan are also set to announce monetary policy decisions later this week.
Price action
- Gold for August delivery GC00, +0.07% GCQ23, +0.07% climbed by $1.50, or nearly 0.1%, to settle at $1,963.70 an ounce on Comex, a day after losing 0.2%.
- Silver futures for September delivery SI00, -0.20% SIU23, -0.20% gained 24 cents, or 1%, at $24.82 an ounce after losing 1.1% on Monday.
- October platinum PLV23, -0.08% rose $7.10, or 0.7%, to $976.60 per ounce, while palladium for September PAU23, +0.02% gained $12.40, or 1%, to $1,281.20 per ounce.
- September copper HGU23, -0.22% added 6 cents, or 1.6%, to $3.92 per pound.
Price action
[]“This could be an explosively volatile week for gold due to the Federal Reserve rate decision and incoming key U.S. economic data,” said Lukman Otunuga, manager, market analysis at FXTM. Bulls are “already lurking in the vicinity,” with prices pressing above the sticky $1,960.
[]Whatever the outcome of the Fed decision, “it is likely to rock zero-yielding gold on Wednesday,” he said in market commentary.
[]Comments from Fed Chairman Jerome Powell on Wednesday in a press conference following the Fed rate decision may offer some insight about the central bank’s plans for further interest rate hikes.
[]Read: Everyone thinks the Fed’s rate hike this week will be the final one — except the Fed
[]Although the Fed left rates on hold in June after delivering 10 consecutive interest-rate hikes, the central bank is widely expected to raise rates by another 25 basis points at this meeting.
[]Any sign that the central bank is planning further hikes beyond July — perhaps another move at its September meeting, or later — could weigh on gold prices, which have benefited from the latest batch of inflation data showing price pressures easing more quickly than expected.
[]“The downside risk to gold as we wrap up July will be whether the Fed leaves the door somewhat open for further increases to US interest rates,” Jameel Ahmad, chief analyst at Dubai-based brokerage GTC, said in emailed comments to MarketWatch.
[]Key U.S. economic data this week include a reading on second quarter gross domestic product on Thursday and the personal consumption expenditure price index on Friday, the Fed’s preferred inflation gauge.
[]On Tuesday, a survey of U.S. consumer confidence climbed to a two-year high of 117.0 in July.
[]It would be “wise to keep a close eye” on the key U.S. Q2 GDP, initial jobless claims, durable goods and June PCE data in the second half of the week, said Otunuga. “When factoring in how these key releases may impact Fed hike expectations beyond July’s policy meeting, this could translate to heightened volatility for gold.”
U.S. soft landing is ‘wishful thinking,’ says billionaire businessman Thomas Peterffy. ‘The market should be much lower.’
[]Thomas Peterffy, the billionaire founder and chairman of electronic brokerage giant Interactive Brokers Group Inc., thinks the rally in the U.S. stock market is overdone, and views hopes for a soft landing for the U.S. economy as simply “wishful thinking.”
[]Myra P. Saefong, assistant global markets editor, has covered the commodities sector for MarketWatch for 20 years. She has spent the bulk of her years at the company writing the daily Futures Movers and Metals Stocks columns and has been writing the weekly Commodities Corner column since 2005.
[]Joseph Adinolfi is a markets reporter at MarketWatch.
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