On Friday (November 17th), gold prices hit a two-week high due to signals from the Federal Reserve and weak demand for the US dollar.
Spot gold closed 0.03% lower at $1980.65 per ounce.
COMEX December gold futures settled 0.13% lower at $1984.70 per ounce, up 2.42% this week.
COMEX December silver futures settled 0.34% lower at $23.852 per ounce, with a cumulative increase of 7.05% this week.
Market News Analysis
Gold prices rose slightly on Friday, reaching a high of $1995 per ounce and currently trading at $1980 per ounce. After the strong US housing data was released, the hawkish comments of the Federal Reserve officials and the recovery of the US treasury bond bond yield prevented the price increase. US treasury bond bonds rose slightly.
The monthly data released by the US Census Bureau on Friday showed that the new home construction rate in October increased by 1.9% compared to the revised 3.1% in September, while building permits increased by 1.1% during the same period, following a decrease of 4.5% from previous data.
Boston Fed Chairman Susan Collins stated on Friday that she has observed evidence that financial conditions are still favorable for the Fed and welcomes the recent cooling of inflation. However, she later stated that she would not abandon further tightening policies, which seemed to scare the market.
In other aspects, US bond yields rose slightly. The 2-year yield is 4.91%, while the 5-year and 10-year yields are 4.46% and 4.45%, respectively. In terms of expectations, the market continues to digest the expectation that the Federal Reserve will not raise interest rates in December.
The market is currently digesting the possibility of interest rate cuts in the first half of 2024, so gold prices are still expected to record their first rise in three weeks. Gold prices rose for the second day in a row, marking the the fourth day day of gains in the previous five days, and retested the nearly two-week high. In addition, the market is currently digesting the possibility of interest rate cuts in the first half of 2024. This, in turn, dragged the yield of benchmark 10-year US treasury bond bonds to a low in more than two months and was seen as supporting non yield bonds.
At the same time, expectations of the Fed's shift towards doves have not helped the US dollar show any meaningful rebound from its lowest level since September 1st, which was hit on Tuesday.
The US Consumer Price Index report released earlier this week showed that consumer inflation has cooled faster than expected, while Thursday's initial jobless claims in the US indicate that the labor market is cooling.
In addition, the recent sharp drop in oil prices is expected to have a deflationary effect, which will bring the Federal Reserve closer to its 2% target and soften its tough stance.
This week, many influential Federal Reserve officials acknowledged progress in curbing inflation, reinforcing the view that policy tightening actions may soon come to an end.
Commerzbank predicts that gold prices will continue to exceed the $2000/ounce mark by mid next year. Economists at Commerzbank in Germany analyzed the prospects of gold and said, The upward potential of gold prices may be depleted in the short term. US inflation data was unexpectedly mild, leading to the Federal Reserve's decision in December (ultimately) The possibility of raising interest rates is unlikely. Nevertheless, it may take some time for the market to completely transform and begin speculating that the US is about to cut interest rates. In other words, the recovery of the gold market is unlikely to continue. We expect gold prices to continue to exceed the $2000/oz mark by the middle of next year
This week, 12 Wall Street analysts participated in the Kitco News gold survey. Just like last week, three experts (25%) predict that gold prices will rise next week, but only one expert (8%) predicts that gold prices will fall this week. The vast majority (67%) hold a neutral attitude towards gold in the coming week.
Meanwhile, Kitco's online poll generated a total of 595 votes, and market participants' attitudes were more optimistic than last week's survey. 394 retail investors (66%) expect gold prices to rise next week. An additional 125 respondents (21%) expect prices to be lower, while 76 respondents (13%) are neutral about the near future prospects of precious metals.
Next week will be a brief trading and economic data release week, as Thursday is the Thanksgiving holiday in the United States, which means most activities will be compressed into the first three days. Highlights include the release of the latest minutes of the Federal Open Market Committee meeting on Tuesday and existing home sales data for October, followed by the release of durable goods data for October, consumer confidence data for November from the University of Michigan, and weekly unemployment claims on Wednesday.
