Gold jumps more than 1% ahead of crucial U.S. inflation data
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Precious metals futures rallied more than 1% on Monday, continuing their recovery from early August’s selloff and ahead of crucial U.S. data releases on consumer and producer prices this week, which could provide clues on the Federal Reserve’s pathway towards easing monetary policy.
Higher than expected U.S. inflation data could put some pressure on gold as interest rate cut expectations could recede, but cooling inflation should bolster expectations of softer Fed policy and drive gold prices to the upside, Tickmill managing principal Joseph Dahrieh said, according to Dow Jones.
U.S. Treasury bond yields turned lower, with the 10-year benchmark note rate down 4 bps to 3.90% ahead of the release of inflation data.
At the same time, geopolitical tensions, especially in the Middle East, continue to bolster gold’s safe haven appeal, Dahrieh also said.
Front-month Comex gold (XAUUSD:CUR) for August delivery closed +1.2% to $2,462.40/oz, its fourth straight daily gain and best settlement since July 16, and front-month August Comex silver (XAGUSD:CUR) ended +1.5% to $27.917/oz, its highest settlement value since August 2.
ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), (OUNZ), (SLV), (PSLV), (SIVR), (SIL), (SILJ)
Mining equities tallied substantial gains, including IAMGOLD (IAG) +10.3%, Barrick Gold (GOLD) +9.1%, New Gold (NGD) +7.6%, NovaGold (NG) +6%, Kinross Gold (KGC) +5.2%, Seabridge Gold (SA) +4.9%, Gold Royalty (GROY) +4.8%, Eldorado Gold (EGO) +4.6%, B2Gold (BTG) +4%, Alamos Gold (AGI) +4%, Agnico Eagle Mines (AEM) +3.5%, Newmont (NEM) +2.2%.
Osisko Mining (OTCPK:OBNNF) +63% in Toronto trading after Gold Fields (GFI) agreed to buy the Canadian company in a deal valued at C$2.16B (US$1.6B); Gold Fields shares settled -4.6%.
“What we’re seeing today in the gold and silver markets is some price support coming from bullish charts in gold prompting some technical buying,” as well as “a little bit of safe-haven demand coming from heightened tensions in the Middle East,” Kitco Metals analyst Jim Wycoff said, as reported by Reuters.