On Friday, gold prices rose slightly from a 10-day low, taking some relief from the dollar’s fall from a near-six-month high. Additionally, some safe haven demand for the yellow metal was driven by concerns about worsening tensions between the United States and China and weak Japanese data. Despite this, gold prices were still on track for a weekly loss as a result of renewed worries about rising interest rates following this week’s strong labor market and inflation readings in the United States. Gold prices fell throughout the week as a result of a spike in the dollar and Treasury yields, but bullion prices rose on Friday as a result of some profit-taking in the greenback. In comparison to a basket of currencies, the dollar lost nearly 0.2 percent, and 10-year Treasury yields lost 0.8 percent.
Gold futures expiring in December saw a 0.3 percent increase to $1,948.95 per ounce, while spot gold rose to $1,925.04 per ounce. For the week, both instruments were roughly 0.7% lower. Some safe haven positioning in gold was prompted by the worsening rhetoric between Washington and Beijing, particularly in light of reports that China had asked government officials to stop using Apple’s iPhone. Markets dreaded more disturbances in worldwide exchange originating from a restored Sino-U.S. exchange battle, as some U.S. officials likewise required a sweeping restriction on tech products to China.
This week’s strong readings on jobless claims and service sector prices raised concerns that the Federal Reserve will be more motivated to keep interest rates high. In spite of the fact that the central bank is widely anticipated to maintain interest rates at levels that are higher than they have been in over 20 years later this month, it is also anticipated that it will largely maintain its hawkish message in light of persistent inflation and a robust labor market. The possibility of higher U.S. rates bodes inadequately for gold, considering that higher rates increase the open door cost of putting resources into non-yielding resources. Gold’s appeal as a safe haven was also weakened by the declining likelihood of a recession in the United States. However, demand for the yellow metal may still be supported by worsening economic conditions elsewhere in the world.
The Japanese economy expanded less in the second quarter than initially anticipated, according to data released on Friday. A number of China’s weak economic readings, particularly on international trade and service sector activity, came before this. Among modern metals, copper fates fell 0.4% to $3.7453 a pound on Friday, expanding misfortunes in the midst of proceeded with worries over significant merchant China. Chinese data released on Thursday revealed that copper imports to the country decreased by 5% in August compared to the previous month, further deteriorating Sino-American relations. This demonstrated that interest for the red metal was cooling in the midst of frail assembling movement and a desperate property market. Even though Beijing has maintained a largely conservative approach to providing additional economic support, investors in the world’s largest copper importer are currently waiting for additional stimulus measures.