Gold fighting this morning against a stronger dollar. Late Thursday, investors turned to the dollar as an alternate safe-haven asset amid political uncertainty in the U.S.
The dollar Index hit a new high for 2019 in the early hours today responding to a weakened euro as well as domestic concerns.
The economic data released this morning contained few surprises so the market response was minimal. The core PCE data for August — the Fed’s preferred inflation measure –was down slightly from July, hitting the forecast .1% increase. Personal income for August ticked up .4%, beating July’s .1%, while personal spending was up only .1% from July, failing to meet the expected .3%.
U.S. House of Representatives launched an impeachment inquiry into President Donald Trump this week after a whistleblower raised concerns that Trump abused his power to help his reelection during a call with the Ukrainian president.
The December gold contract rose 0.2% Thursday to settle at $1,515.20 an ounce on Comex. Bullion gained just 10 cents in the first four days of the week. Overnight, gold slid and has been striving to regain ground this morning. Currently, the December contract at $1,497.30.
Gold production in Russia rose to 101.44 metric tons in the first five months of this year from 92.56 tons in the same period in 2018, Russia’s Finance Ministry said Thursday, according to Reuters.
Silver slipped 0.9% Thursday but has outpaced gold for the week, with the most-active December up 0.4% through Thursday. Spot palladium, which hit a new record high earlier this week, climbed 1.5% Thursday and advanced 1.6% in the first four days of the week amid continued worries about supplies from South Africa and increased demand from China. Spot platinum increased 0.4% Thursday and has retreated 1.6% for the week through Thursday.
Investors continue to closely watch the trade dispute between the U.S. and China, tensions in the Middle East, the status of Brexit, the state of the global economy and the possibility of further monetary easing.
Trade talks between the U.S. and China are set to resume Oct. 10 in Washington, CNBC reported, citing three people close to the negotiations. Meanwhile, Iranian President Hassan Rouhani said at a press conference Thursday in New York that his country had “nothing to do with” the drone strike on oil facilities in Saudi Arabia earlier this month, NBC News reported.
On Brexit, European Union leaders believe a new extension to the end-of-October deadline is now “likely,” the BBC said.
In economic news, U.S. GDP grew at a 2% annual pace in the second quarter, unchanged from the previous estimate, government data showed Thursday. Separately, the Labor Department reported that the number of Americans who filed claims for jobless benefits rose by 3,000 last week to 213,000. MarketWatch’s consensus figure called for a 211,000 increase.
The CME FedWatch Tool shows that now 57.2% of investors think the Fed won’t cut interest rates when policy makers meet Oct. 30. The probability of a third consecutive 25-basis-point reduction was 42.8% early Friday.