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Gold Price Stays Positive Ahead of Inflation Data

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  • Gold Taking Advantage of Market Sentiment
  • Silver Steady as Oil Hits High
  • Inflation and Other Important Drivers Ahead

In commodities news, gold has been quick to take advantage of the current risk-on period in the market. Improving sentiment that has led to a movement away from the Dollar has helped the precious metal claw back some gains on a largely positive week. This was a generally similar picture across the board with the same true in the silver market that has held on to its level well. With oil now at a 3-year high, the focus today turns to key inflation data and what type of movements we might see when these PCE figures are released with a +3.4% expectation.

Positive Chain of Events for Gold Price

Gold prices have been slipping of late. Well down from their record highs which have been seen, the metal is now also trading below $1800. This week brought upward movement from the market though with the price going back close to the $1800 level as more optimism crept into the economy on the back of the infrastructure bill bipartisan agreement which should see the spending plans get through the Senate with comfort.

This news moved the US Dollar lower as many moved away from the traditional safe haven and into other assets. The weakening Dollar has helped gold prices to move positively again although much lays on the PCE data that will be released later today. Declining US Treasury yields have also helped the price to stay close to this key level as the market decides which way to turn.

Silver Remains Strong With Oil at High Point 

The price of silver has also remained consistent of late. The metal is now trading at $26 and enjoying a positive move thanks to the level of enthusiastic sentiment in the economy. Bullish analysts are still predicting higher points for silver as the economy continues to heat up strongly.

Another commodity that has seen a huge rebound is oil. Prices per barrel have continued to rise steadily even with possible easing of quotas on the horizon from OPEC. Strong demand has resulted in what is now close to a 3-year high price with WTI Crude trading close to $73, and Brent Crude near $75 a barrel.

Inflation Figures May Hold Key to Next Move

The focus for gold in particular will now switch to the news coming from the PCE numbers. These are used as a good guide by the Federal Reserve on inflation which is the hot topic of the moment and something that continues to have people concerned. Experts have predicted the data today to show a year-over-year increase of 3.4%.

Anything above this could spark a run back to the safety of the US Dollar. In the short-term at least, that would prove negative for gold prices, though the opposite is also true if the numbers come in lower than expected.

Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world. A keen trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.

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