Gold prices remained steady around previous session highs on Friday as traders looked to cap a volatile trading week that tanked the market and led to a widespread sell-off on fears of a recession.
As anxiety eased on Wall Street after stocks rallied from the brink, bullion investors turned their attention to next week’s release of key inflation data – including the U.S. consumer price index (CPI) – to gauge how aggressively the Fed might cut interest rates in September.
The yellow metal, which was on track for its largest weekly decline since June 7, hovered around $2,430 per ounce in early Friday trading, up $4.36. After staging a comeback a day earlier with gains of more than 3%, silver had dipped back into negative territory, down $0.07 at $27.48 per ounce.
The market collapse at the beginning of the week prompted calls from analysts and business leaders for the Fed to intervene with an emergency rate cut ahead of September’s next Federal Open Market Committee meeting.
“There are increasing expectations that the Fed will cut interest rates at their September meeting, and one senses some frustration in the markets that the higher-for-longer narrative is long beyond its sell-by date,” independent analyst Ross Norman told Reuters on Friday.
Concerns by the market that the Fed had waited too long to adjust interest rates were blunted somewhat by Thursday’s better than anticipated jobs report from the Department of Labor, which showed a decrease in initial unemployment claims for the week ending Aug. 3.
Investors will be closely watching next week’s CPI data and updated unemployment figures to glimpse a fuller picture of the U.S. economy and labor market.
Optimism over potential rate cuts and geopolitical fallout from the Israeli-Palestinian conflict and ongoing war between Ukraine and Russia continue to insulate gold and silver from experiencing more erratic price swings.
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