GoldPrice.

Happy Friday, traders. Welcome to our weekly market wrap, where we take a look back at these last five trading days with a focus on the market news, economic data and headlines that had the most impact on gold prices and other key correlated assets— and may continue to into the future.

Rolling into the afternoon, gold prices are set to turn in the first losing week in three.
 

Gold is looking a bit like the odd man out as Friday draws this week’s trading to a close, owed largely to fatigue in the rally that had briefly driven the yellow metal to all-time highs over the last month. Prices were being closely watched on Monday after an early-hours sell-off pushed prices below the support line at $2400/oz. Although a healthy flow of buyers seemed happy at that time to step into the market at just $2390, the rest of the Monday session across most asset classes traded much more inert than we expected following the upheaval in the US Presidential race over the weekend. So, there wasn’t any more volatility to drive spot prices higher than there was to pressure them lower.

Through the thick of the week, the gold market was generally flat as the post-rally fatigue blended into the typical summer doldrums that always come in the middle of July. Add to that a relatively sparse macroeconomic calendar this week and the pre-FOMC blackout period putting a nix on any public remarks from key Fed officials, and the gold market felt devoid of any inputs that would drive trading activity day-to-day. These sessions were not entirely unremarkable, though. Even as equity markets appeared to struggle mightily during the week due to a mix of disappointing earnings from some key names and a moderate increase in handwringing about just how stubborn the Fed may be about holding off on their first rate-cut, the $2400 level that had been such a staunch point of support for gold in recent weeks seemed to now be providing tough resistance against whatever efforts the precious metal made to rally while lacking strong volatility or a clear viewpoint.

The ground briefly gave a little further for gold prices on Thursday in light of some headwinds from China, one of the globe’s key gold-buying economies, after the PBOC announced an unexpected rate cut. Still, after an overnight rebound leading into Friday morning, gold spot rolled into Friday’s PCE report, the one key print of the week, just $5-10/oz below its Monday close.

For the month of June 2024, the “core” PCE Price Index (as a measure of overall inflation in the US) rose +0.2%, hotter than expected. Depending on how you view this data point, willfully or otherwise, this was either a modest increase of just ten basis points above the consensus to confirm that inflation is effectively tamed, or it was twice as hot as the consensus projection, indicating that the FOMC will likely hold rates in place closer to Christmas. Truthfully, traders deep in the gold market appeared convinced of neither takes when the chart initially received just a slight bump after the print. Looking at the week as a whole, it’s possible that the upside PCE surprise could have kicked off a steep slide in gold had it still been trading above $2400 at the time. Instead, prices held serve through to the US market open, from which point the yellow metal actually enjoyed the first moderate rally of the week to return to $2385/oz.

It’s difficult to interpret the gold market’s viewpoint here. Will the fatigue we’ve seen this week persist through the rest of the summer? Or is gold seeing some support and a mild Friday rebound alongside other asset classes that seem to be turning towards pricing in the benefits of the first FOMC rate cut, whether it comes in August or December? Next week’s calendar brings us much larger turns to trade off of: the July FOMC meeting wraps up on Wednesday, and Friday caps the week off with the June Jobs Report.

In the meantime, traders, I hope you can get out and safely enjoy your weekend for the next couple of days. After that, I’ll see you back here next week for another market recap.