On Friday, the precious safe-haven gold futures’ prices had faltered nearly 1.0 per cent with palladium contracts witnessing their first weekly declines in four, as a torrential high-tide in US Dollar following a robust uptick in US retail sales in June had blunted the yellow metal’s safe-haven appeal, pushing it away from a one-month peak hit on the previous session.
Nonetheless, despite Friday’s headwind, gold futures’ prices had reported their fourth straight weekly percentage gain. In point of fact, in the day’s steep downturn in gold prices was almost entirely catalysed by a stronger US Dollar, which gained as much as 0.6 per cent last week following reveal of an unprecedented increase in US retail sales last month, while a growing anticipation that the US Fed would be forced to taper off fiscal support following an upward spiral in inflation indicators with US Consumer Prices Index accelerating at the steepest pace in 13 years last month, tempered the bullion’s safe-haven appeal.
Gold, palladium fall as US Dollar gain after robust data, higher inflation
Citing statistics, in the day’s commodity market round-off, spot gold fell 0.8 per cent to $1812.11 an ounce, while US gold futures’ prices ended 0.8 per cent lower to $1,815 per ounce.
In the week, spot gold prices gained 0.3 per cent. Among other precious metals, silver fell 2.3 per cent to $25.71 an ounce and palladium contracts shed 3.2 per cent to $2,644.20 an ounce, remarking their first weekly decline in four weeks, while platinum lost 2.9 per cent to wrap up the session at $1,105.3 an ounce.
Meanwhile, addressing to gold’s inability to exploit a multi-year low US Treasury bond notes that might make the bullion vulnerable in a longer-term, a TD Securities Commodity strategist Daniel Ghali said, “Although gold’s valuation is more attractive on a relative basis to U.S.
Treasury inflation protected securities (TIPS), the reason gold is trading at a discount to it is because it does not have the same carry advantage”.