Metals Stocks: Gold futures edge higher as U.S. inflation data meets market expectations

by | Jan 27, 2023 | Stock Market

Gold futures climbed on Friday, looking to end the week with a slight gain after touching their highest level in nine months earlier this week, as the latest reading on U.S. inflation met with most market expectations.Price action
Gold prices for February

rose $1.30, or nearly 0.1%, at $1,931.30 an ounce on Comex, with the most-active contract up almost 0.2% for the week. Prices traded at a nine-month high earlier in the week.

Silver prices for March

fell by 36 cents, or 1.5%, to $23.66 per ounce, trading more than 1% lower for the week.

March palladium
fell by $51.30, or 3.1%, to $1,612.50 per ounce, down over 6% for the week, while platinum for April
declined by $13.40, or 1.3%, to $1,009.60 an ounce, nearly 4% lower for the week.

Copper for March
fell by 6.1 cents, or 1.4%, to $4.206 a pound, eying a weekly loss of over 1%.

Market drivers Friday’s U.S. PCE inflation numbers came in line with most market expectations.

Consumer prices increased by just 0.1% in December, the smallest increase in 15 months. The annual increase in prices slowed to 5% in December from 5.5% in the prior month and a 40-year high of 7% last summer. The increase in the core rate of inflation in the past 12 months decelerated to 4.4% from 4.7%. That’s also the lowest level in 14 months. An annualized decline to 4.4% “appears to confirm” a 25 basis point interest-rate hike at the Federal Reserve’s meeting next week, said Michael Hewson, chief market analyst at CMC Markets UK, in a market update. The Fed will announce its policy decision on Feb. 1. See: Inflation rate in the U.S. slows again to 15-month low, PCE shows “The Fed’s biggest problem now will be to ensure that market expectations about rate cuts get pared back,” said Hewson. Separately, U.S. consumer sentiment improved in late January to 64.9, according to the University of Michigan’s gauge of consumer attitudes. This was up from the initial January reading of 64.6. Economists surveyed by The Wall Street Journal had forecast an unchanged reading of 64.6. Strength in the U.S. dollar following the latest economic data helped to limit Friday’s rise for dollar-denominated gold prices. The ICE U.S. Dollar index
added 0.2% to 102.03, though traded little changed for the week.

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