Gold prices on Friday marked the first time above $1,900 an ounce since April, finding support from the US dollar’s weekly decline after data showed US inflation slowed. .
The price of the most active gold contract also reached the so-called “golden cross” on Friday. That happens when the short-term price moving average crosses above the long-term moving average, potentially indicating a shift in sentiment towards the metal.
price action
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Gold futures contract for February delivery
GC00,
+1.29% up $22.90, or 1.2%, to $1,921.70 an ounce. The price of the most active contract ended 2.8% higher for the week and has not settled above $1,900 since late April, according to Dow Jones Market Data.
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silver march
SI00,
+1.75% rose 37 cents, or 1.5%, to $24,372 an ounce, for a weekly gain of 1.6%.
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Palladium for March
PAH23,
+0.12% fell $3.60, or 0.2%, to $1,787.30 an ounce, losing 1.1% for the week, while platinum
PLJ23,
-0.79% fell $11.80, or 1.1%, to $1,072.50 an ounce, recording a weekly decline of 2.9%.
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March dong
HG00,
+0.51% rose 2 cents, or 0.5%, to $4,216 a pound, marking once again the highest level since June. For the week, copper futures rose 7.8%.
Market Drivers
Brien Lundin, editor of the Gold Bulletin, told MarketWatch: “Gold easily broke through $1,900 and hitting these big numbers should help attract trend investors.
Dow Jones market data showed that the most active gold futures contracts formed a golden cross on Friday, with the 50-day moving average rising to $1,789.94, breaking above the moving averages. 200 days is $1,786.74. The last golden cross was seen on February 11, 2022.
A golden cross for gold “will attract more buying from technically oriented traders,” Lundin said.
Gold futures contracts extended gains from Thursday, as signs of US inflation cooled with the December consumer price index weighing on the dollar and helping push the yellow metal higher again.
US Dollar Index ICE
DXY,
gauge of the greenback’s strength against a basket of rivals, fell nearly 1% on Thursday ahead of the CPI data. In Friday’s trades, it fell nearly 0.1% to 102,192.
Lundin said the dollar’s downtrend is supporting gold and that looks “likely to continue”.
Rupert Rowling, market analyst at Kinesis Money, said Thursday’s CPI data “confirms that inflation is currently trending downward, although still significantly above the Fed’s 2% target”. “As such, while the US central bank remains likely to raise its benchmark interest rate when the committee meets later this month, the expectation now is that the increase will be only 25 basis points.”
Meanwhile, data released on Friday showed a US consumer sentiment survey rose to 64.6 in January, a nine-month high, reflecting easing inflation worries.
As Lundin pointed out, “one can essentially consider that there are two fundamental paths forward for monetary policy: the Fed pauses and possibly pivots, once it has succeeded in bringing inflation down. close to the target level, or the Fed does so without causing inflation to fall below the target level. close to its 2% target.”
“Both outcomes will increase the price of gold, but the latter is even more so because it will not increase the price of stocks or bonds” – and will attract a much larger allocation from investors, he said. diversified investment portfolio.
So, “from both a fundamental and technical standpoint, it looks like this bull run has had some success,” Lundin said. “It’s a bit overbought at the moment, so next week’s pause wouldn’t come as a surprise, but neither should we downplay the upside momentum the metal is currently showing.”
““From both a fundamental and technical point of view, it looks like this bull run has given some indication. It’s a bit overbought at the moment, so next week’s pause wouldn’t come as a surprise, but neither should we downgrade the momentum the metal is currently showing.” “
Gold has been in a state of recovery since early November, but its most recent rally this year has caught the market’s attention as investors wonder if the precious metal can make a comeback. return to the high north of $2,000/ounce recorded in March of last year or not.
