Gold futures are at historical highs and experts' views on gold
• Bullion is up more than 1% for the week.
• Silver, platinum and palladium lead weekly gains.
• Analyst: Gold may need additional catalysts to break $2,500.
• Minutes from the Fed's July policy meeting will be released on Wednesday.
Gold prices rose slightly on Friday and were expected to post weekly gains on growing optimism about a U.S. interest rate cut in September, although expectations that the Federal Reserve will pursue aggressive easing have softened ahead of Chairman Jerome Powell's upcoming speech.
Spot gold rose 0.3% to 2,462.82 an ounce as of 1002 GMT and is up more than 1% this week. Gold futures
rose 0.3% to $2,500.50.
"Gold traders are proceeding with caution this week as US data significantly reduces the likelihood of a 50 basis point rate cut in September"!
US inflation data indicates that gold may need additional catalysts to break above the $2,500 mark. While this level may eventually be reached, it is unlikely in the near future as gold is expected to remain in the $2,360 to $2,480 range.
The latest data has restored confidence that was shaken by an unexpectedly weak jobs report earlier this month. They also bolstered optimism about improving inflation, as evidenced by the July PPI and CPI releases this week.
Traders are confident the Fed will cut rates on September 18, but have debated the size of the cut. The odds of a 50 basis point cut now stand at 25%, down from 36% a day earlier, according to CME Group's FedWatch tool.
Low interest rates tend to make non-yielding bullion more attractive.
Gold futures were broadly unchanged at $2,491.5 a troy ounce as a string of U.S. economic data this week failed to help the precious metal break out of a tight range. Unless there is a significant change in market expectations, gold prices will likely remain in a wide range for now, said Dilyn Wu, research strategist at Pepperstone. As extreme fears of a US recession have faded, more traditional factors are driving gold trading. While the bullish case for gold is clear - expected rate cuts, increased geopolitical risks and rising tensions in the Middle East - a key catalyst is missing, Wu said in his note. The biggest risk for the precious metal is US non-farm payroll data due in early September, which could fuel recession fears if job growth slows and unemployment remains sticky, Wu added.
Comex gold futures are likely trying to resume their upward move based on the daily chart, Joseph Chai, an analyst at RHB Retail Research, said in a commentary. Futures price action overnight indicates that selling pressure is easing and that the precious metal could form an intermediate base and continue above the $2,450/oz support level, Chai said. In addition, futures are trading above the 20- and 50-day simple moving averages, suggesting bulls have a technical advantage, Chai said. As long as the precious metal remains above support at $2,450/oz, trade bias remains positive, Chai said, adding that immediate resistance lies at $2,600/oz. Spot gold was 0.2% lower at $2,452.76/oz.
Gold traders in India were forced to offer discounts this week as recent price increases dampened retail buying volumes while demand in other key Asian centers also remained weak.
“Retail purchases have slowed due to rising prices. Jewelers have reported lower footfall this week,” said a New Delhi-based dealer.
In India, the world's second-largest gold consumer and a major importer, domestic prices (MAUc1) stood at around Rs 70,300 per 10 grams on Friday after hitting a four-month low of Rs 67,400 on July 25.
“Jewelry manufacturers are hoping that demand will improve during the peak festival season. They received decent orders from jewelers for the festival season during the India International Jewelery Exhibition last week,” said a Mumbai-based bullion trader.
Indian dealers offered a discount (XAU-IN-PREM) of up to $3 per ounce over official domestic prices, including 6% import duties and 3% trade levies, down from the previous week's premium of $9.
In China (XAU-CN-PREM), dealers were offering an $8.5 discount to the $5 premium per ounce on the international spot price. Premiums reached $18 last week.
The slight increase in trading volume seen in Shanghai last week has been wiped out, said Hugo Pascal, precious metals trader at InProved.
Analysts and traders say demand for safe bullion in China could rise towards the end of the year as economic and geopolitical uncertainty still persists.
In Singapore, bars were trading at a discount of $0.75 to $2.2 per ounce (XAU-SG-PREM).
"Some wholesalers have bought gold in anticipation of higher prices, but overall demand has remained subdued," said Brian Lan of Singapore dealer GoldSilver Central.
“I expect demand to pick up in the final quarter as we typically see increased purchases as jewelry manufacturers look to replenish their inventories.”
Meanwhile, in Japan, gold was trading at par (XAU-TK-PREM) and in Hong Kong at a $1 discount versus a $2 premium (XAU-HK-PREM).
The metal continues to benefit from its safe-haven status amid rising tensions in the Middle East, especially with fears of a possible Iranian retaliatory strike against Israel.
Silver fell 0.6% to $28.22 an ounce and platinum fell 0.2% to $951.05 after rising 4% to hit a two-week high on Thursday. Palladium was down 0.6% at $941.19.
All metals showed weekly growth.