This morning gold is trading at 1383.25 gaining $5.45 in the Asian session. This has been the typical trend for the shiny metal, adding in the Asian session to give back gains throughout the European session. Spot gold lost ground on Thursday following the release of better-than-expected US economic data. Retail sales rose 0.6% in May, beating forecasts for +0.4%. Initial jobless claims, meanwhile, fell to 334,000 last week, the second straight decline; economists had expected 350,000. Gold investors have been closely monitoring recent US economic data for clues as to how long the Federal Reserve may deem it necessary to continue its growth-boosting stimulus program. Gold speculators are paying very little attention to the basis of economic data but reacting to what is perceived as clues to the central bankers thought processes. Gold investors are single mind when it comes to gold and the upcoming FOMC meeting.
Precious metals declined for a second day as holdings in the largest bullion backed exchange-traded product dropped to the lowest level in more than four years amid speculation the Federal Reserve will curb stimulus. Gold for August delivery climbed 0.4 percent to $1,383.60 an ounce on the Comex after falling 1 percent yesterday when a report showed fewer Americans than forecast filed applications for jobless benefits.
Assets in the SPDR Gold Trust fell 0.6 percent to 1,003.53 metric tons yesterday, according to data on the company’s website. That’s the biggest fall since May 21 and the lowest level since February 2009. Fed Chairman Ben S. Bernanke said on May 22 the central bank could reduce its $85 billion monthly bond purchases if the employment outlook shows a sustainable improvement. Gold traders turned bearish for the first time in a month as investors reduced holdings in exchange-traded products and India, the biggest buyer, announced curbs on imports. Eighteen analysts surveyed by Bloomberg expect prices to fall next week, with 14 bullish and four neutral, the largest proportion of bears since May 17.
The weaker US dollar has done little to help increase prices, but has limited the drop in prices. The US dollar is trading at 80.94 climbing 5 pips on Friday morning but well off its recent highs above the 84 level. Weakness in the greenback has helped the euro climb to trade at 1.3356 as market focus is on the Japanese yen, which has gained momentum against the greenback to trade at 95.00 this morning.
Silver is tracking changes in gold to trade at 21.67 gaining 92 pips as traders take advantage of a weak US dollar and low prices to buy it on the cheap. Silver is expected to continue its climb during the day as traders look for a large amount of eco data due in the eurozone and the US later today with consumer confidence the main event schedule for late in the North American session.