Gold prices were range bound on Tuesday, ending the day little changed from the previous day.
Prices briefly climbed to just under $2,040 an ounce, compared with $2,031 an ounce in late deals Monday. However, the upward move could not be sustained, and prices fell back through the afternoon to trade at around the $2,030 mark in late trades.
US durable goods orders figures came out Thursday showing a monthly drop of 6.1% in January, significantly larger than the market’s expected 4.5% fall. This was the largest monthly drop since April 2020, and suggests the US economy may have made a weaker start to 2024 than many had expected. However, the monthly figures tend to be volatile and one month of data alone would not be expected to carry much weight. The markets will be watching out for February’s figure, as two consecutive downturns of that magnitude might be seen as more significant.
Other things being equal, signs of a weaker economy would be expected to support gold as they imply greater pressure on central banks to cut interest rates – a bullish outcome for assets that don’t generate a yield.
Nevertheless, gold’s inability to add to the previous week’s gains may reflect market uncertainty and caution over the timing of expected interest rate cuts.
Looking ahead, Wednesday will see the release of US GDP growth figures for Q4 2023, followed by comments from US Fed officials, all of which are likely to feed into the wider picture of monetary policy direction in the US. Then on Thursday, the markets will get an update on the latest weekly US initial jobless claims for the week ending February 24.
Frank’s experience covering the commodities markets spans 22 years, with a particular specialism in metals, carbon and energy markets. He has worked as a senior editor for S&P Global Commodity Insights (formerly Platts) and before this, at ICIS-LOR, a part of Reed Business Information (Reed Elsevier), where he covered the petrochemicals markets from 2003 to 2005.
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