Happy Friday, traders. Welcome back to our Weekly Market Wrap-up, where we dive into the economic events and market news that have significantly impacted gold prices and other precious metals throughout the week. Gold took a sharp hit from hotter-than-expected US inflation data this week, but the selloff did not last. Spot prices fell nearly $100/oz after Wednesday’s consumer inflation report, reaching a weekly low near $4,080. September’s producer inflation reading then came in even hotter: PPI rose 1.3% month over month, 80 basis points above the consensus estimate. Under more familiar market conditions, those surprises might have kept gold under pressure as investors priced in the prospect of higher interest rates for longer. Instead, the yellow metal found buyers and climbed back toward $4,175/oz by Friday morning, narrowing its weekly decline.
The rebound appears to reflect a shift in what investors fear most. Rather than focusing solely on the Fed’s likely response to inflation, markets began to weigh the damage persistent price pressures could do to the broader economy. US equities sold off, while the Dollar Index softened—an unusual combination if expectations for higher rates were the only force at work. With a lighter economic calendar next week ahead of the following week’s FOMC decision, traders will be watching whether gold can maintain its renewed safe-haven appeal or returns to trading mainly on the outlook for monetary policy. |
