Gold prices were trading higher for a second straight session Wednesday as a string of data underscored an overall slowdown across several major sectors of the U.S. economy.
The yellow metal was up $11.86 in midday trading at $2,420 per ounce. Silver, meanwhile, also pushed into positive territory, trading at $29.23 per ounce, up $0.03.
Traders appeared to be capitalizing on gold’s reputation as a safe haven asset in turbulent economic and political times – both of which have been in high supply recently.
On Wednesday, a slew of data told the story of a U.S. economy still wrestling with a slowdown across major industries.
A report by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development found that sales of new, single-family houses last month were at a seasonally adjusted annual rate of 617,000 – 0.6% below May’s revised rate of 621,000 and 7.4% below the June 2023 estimate of 666,000. The figure came in well below Wall Street projections of 640,000 unit sales. The report also found that the median sales price of new houses sold in June was $417,300, with the average sales price at $487,200.
Additionally, another report by the Census Bureau found that advance wholesale inventories rose 0.2% in June from the previous month, while advance retail inventories were up 0.7% from May. Rising inventories can often mean that demand from the market is softer.
Rounding out Wednesday’s less-than-stellar economic progress report, the S&P Global Flash U.S. Composite Purchasing Managers’ Index (PMI) revealed that U.S. business activity growth reached its fastest level in more than two years in July.
But that encouraging headline came with plenty of caveats, including widening disparities in growth as the service sector led the upturn while manufacturing output dipped for the first time in six months.
What’s more, “the positive news was further marred by employment growing at a slower rate, and business confidence in the outlook falling for a second month, fueled in part by rising political uncertainty ahead of the presidential election,” the report said.
Both the economic deterioration and lingering political unrest figure to add to the appeal of owning “safer” commodities like gold in the near term.
Bullion traders now look to several key economic reports expected in the next two days, including second quarter GDP and initial jobless claims coming Thursday and Friday’s lynchpin core personal consumption expenditures price index – the Fed’s preferred method of measuring inflation.
Gold Price Chart
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