Gold prices held steady on Thursday as recent U.S. data showed inflationary pressures easing before a fresh escalation in the Middle East war drove oil prices higher, reviving concerns over elevated energy costs and potential interest rate hikes.
FUNDAMENTALS
Spot gold was little changed at $4,056.59 per ounce by 0046 GMT. U.S. gold futures for August delivery rose 0.3% to $4,062.50.
Oil prices extended gains to a fourth session as the U.S. struck Iran’s coastal defenses and missile sites after reimposing a naval blockade of its ports, while Iran threatened to shut off more regional energy exports, saying it was engaged in an “existential war” with America.
U.S. producer prices unexpectedly fell in June, posting their biggest decline in 14 months amid a pullback in the cost of energy products, further evidence that inflation was subsiding before the recent escalation in the Middle East conflict.
Fed Chairman Kevin Warsh this week declared his determination to bring inflation down without hinting at how, even as colleagues publicly laid out their own views on the economic outlook and interest rates.
Fed Governor Lisa Cook said on Wednesday she is “prepared to act” if inflation does not soon begin to slow.
While inflation is “unquestionably too high,” there are reasons to believe it may have crested and should soon start subsiding, New York Fed President John Williams said.
China’s economy expanded at its slowest pace in more than three years in the second quarter.
Fury Gold Mines said on Wednesday it had temporarily suspended exploration and drilling at its Eau Claire project in northern Quebec after evacuating all personnel due to a nearby forest fire.
Elsewhere, spot silver fell 0.3% to $57.61 per ounce. Platinum eased 0.3% to $1,668.43 and palladium edged 0.3% lower to $1,310.36.
DATA/EVENTS (GMT)
0600 UK GDP Est 3M/3M May
0600 UK GDP Estimate MM, YY May
0600 UK Services MM, YY May
0600 UK Manufacturing Output MM May
0900 EU Total Trade Balance SA May
1230 US Initial Jobless Clm 11 Jul, w/e
1230 US Philly Fed Business Indx Jul
1230 US Retail Sales MM Jun
