Weaker USD Allows Gold to Gain Ground

• Second Weekly Increase in Gold Prices Likely
• Weaker Dollar and Inflation Concerns Key
• Other Precious Metals Also on the Rise

In commodities news, gold prices enter Friday looking to post another strong week and a second consecutive increase in price following what had been a slower period for the precious metal. This comes as the Dollar sold off a little this week and with it giving up a very strong position that has grown over recent weeks. This softening has allowed gold to regain some traction as has the return of some inflation concern. The PMIs release and Fed speeches will be keenly watched on that note. The other precious metals have also managed to get in on the positivity this week.

Return to Strength for Gold Market

Gold had been in something of a slump of late with the US Dollar picking up a head of steam against a backdrop of negative sentiment across the market. This kept the forex market for major currencies down with the exception of the Dollar, and saw a return to strength for the US Dollar index which peaked above 94 at some stages. 

This has been turned around particularly this week as the market mood again shifted on dropping treasury yields and a broadly positive earnings season on Wall Street. This led to a drop in the USD that has been felt with a return to form in gold demand. The precious metal has risen in early trading to sit just below a key psychological mark at $1800 that it will be hoping to close above today.

Attentions Switch to PMI Numbers

The Markit Preliminary PMI numbers are due to be released today from Europe and the US. This is the next area of focus for those trading gold and other commodities as well as forex. Such numbers typically have an impact on the strength of the Dollar, and therefore, the ripple will certainly be felt on commodities. Inflationary pressures are very much expected so these are likely to be priced in already. 

Another area of focus today will be speeches from the Fed and Chair Jerome Powell. As is always the case, analysts will be on the lookout for any indication he may give as to the near-term movements of the Fed on monetary policy. 

Positive Week for Precious Metals

Gold has certainly not been the only winner this week. While it has made positive moves, so too have the other precious metals. Silver has retaken the $24 position this week and looks set for a fifth consecutive positive week with a 0.2% gain as we head into Friday.

At the same time, both Platinum and Palladium are looking to close out what has been an excellent week for both. Platinum is in positive territory by 0.5% and is now trading above $1050 per ounce while the most expensive of the four, Palladium, has added another 1% this week to sit just below $2040.