Gold prices rose on Friday after hitting their lowest level in nearly a week following a steep sell-off earlier in the week. The rebound has come as investors have been awaiting new government data on inflation which would indicate whether the U.S. central bank will cut rates later in the year.
- Spot gold is up 1.3% to $4,982.59 an ounce on Friday morning.Â
- Concerns about its long-term profitability dragged prices 3 per cent lower on Thursday in a broader market sell-off.
- The price of the metal is now remaining firm above $4,900.
- Investors await new U.S. inflation data to be released later today.
- Silver and platinum also posted slight gains after a tough week.
The gold market is subject to fresh buying on Friday, after a choppy week that sent investors in search of stability. The metal caught support from buyers seeing recent price falls as an opportunity after prices broke below the key $5,000 level on Thursday. Spot gold is now trading at around $4,982 this week, up a little bit overall in spite of the recent turbulence.
Market experts notes that gold has been tied to the stock market fairly closely. Gold prices dropped Thursday alongside technology stocks as investors grew concerned about the fallout on the software industry of new artificial intelligence technology. Since gold didn’t have its own bad news event, analysts think it was simply a victim of the general panic that swept through global markets.
One big factor on gold traders’ minds is the health of the U.S. job market. Reports released earlier this week showed that American companies are adding more workers than predicted. Working in an economy that’s doing well is usually good news, but it also means the Federal Reserve will be inclined to keep interest rates relatively high so the economy doesn’t overheat. High interest rates are generally bad for gold because the precious metal pays no interest to its owners.
Now, all eyes are on an upcoming U.S. inflation report. The information is the missing piece of the puzzle for the central bank, it had said. After cooling inflation has cooled down, it could give officials the confidence to cut interest rates as soon as June. But if prices are still climbing too fast, gold may be put under even more pressure as those low-rate expectations fade.
On Friday, other precious metals went along for the ride with gold. Silver rose 2.5% to $77.02, trying to claw back an enormous 11% crash on the previous day. Platinum and palladium also rose, but are both still set to end the week below where they began. This broad-based rebound points to investors coming out of hiding after the initial shock of this week’s mid-week sell-off.
The gold market is forecasted to stay highly responsive to updates from Washington. For now, the metal is still a vital signal of how investors feel about prospects for the global economy. If it can recapture that $5,000 fan level and hold, that could mean a new season of growth for the yellow metal this spring.
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