Gold prices scored back-to-back gains on Tuesday, with the yellow metal moving closer to its settlement last Thursday which marked the second-highest finish for a most-active Comex gold contract on record.
An overall decline in the U.S. dollar, banking-sector issues, and concerns about a weakening U.S. economy were among the reasons behind gold’s move last week toward a fresh record high. Traders on Tuesday awaited the latest U.S. inflation data to better gauge the economic outlook.
- Gold for June delivery
gained $9.70, or 0.5%, to settle at $2,042.90 per ounce on Comex.
- Silver for July delivery
tacked on 6 cents, or nearly 0.3%, to $25.90 per ounce.
- Platinum for July delivery
rose $28.30, or 2.6%, at $1,116 per ounce, while palladium for June delivery
climbed by $16.30, or 1%, to $1,579.70 per ounce.
- Copper for July delivery
declined by 3 cents, or 0.7%, to $3.90 per pound.
Precious-metals investors awaited Wednesday’s U.S. consumer-price index data for April which will give investors another update on the state of inflation, as well as Thursday’s producer price index reading for April.
Now that the Federal Reserve’s May meeting is behind us, “gold markets will be looking to CPI and PPI inflation data for direction,” Andrew Schrage, chief executive officer at Money Crashers, told MarketWatch.
“If those readings come in hot this month, we could see another push toward record highs” in gold, he said.
Lukman Otunuga, manager, market analysis at FXTM, said gold could sink further if U.S. inflation remains “sticky,” which could drag gold back below the $2,015 level.
“Alternatively, signs of cooling inflation could inject gold bulls with renewed confidence, propelling prices back toward this year’s high, he said in a market commentary,
Last Wednesday, the Fed raised a key interest rate again, but signaled it was ready to pause and said further monetary tightening would depend on how inflation and the economy respond to sharply higher borrowing costs.
Schrage said to “watch market expectations for a June rate hike, which could be back on the table if inflation is higher than expected and would provide further support for gold prices.”