Gold prices end slightly higher on global recession fears after ‘brutal week’ that saw 3-month lows

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Gold futures settled slightly higher Friday after three days of falls that took the most-active contract to its lowest settlement in three months following a flurry of interest-rate hikes from central banks in Europe on Thursday.

For the week, the yellow metal logged its biggest weekly drop since February, while sliver prices posted its biggest weekly decline since October 2022, according to Dow Jones Market Data.

Price action

  • Gold futures for August delivery

    gained $5.90, or 0.3%, to settle at $1,929.60 per ounce on Comex. Prices based on the most-active contract saw a weekly loss of 2.1%, according to Dow Jones Market Data.

  • Silver futures for July delivery

    fell by 11 cents, or 0.5%, to end at $22.35 per ounce, with prices ending 7.3% lower for the week.

  • September palladium
    gained $6.40, or 0.5%, to $1,279 per ounce, ending 9.7% lower for the week, while July platinum
    lost $2.80 or 0.3%, to end at $923.70 per ounce, with prices down 6.4% for the week.

  • Copper for July
    fell by 9 cents, or 2.2%, to settle at $3.80 per pound. For the week, it fell 2.2%.

Market drivers

Gold prices managed to find some support on Friday, but both gold and silver still finished the week sharply lower after falling to roughly three-month lows in the previous session.

Central banks in the U.K., Switzerland, Norway, and Turkey raised interest rates on Thursday, while in the past week the Federal Reserve has telegraphed two more interest-rate hikes later this year.

Higher interest rates, which designed to quell inflation, stoked investor concerns over global recession and drove a shift to safe assets which has helped to sap some demand for the yellow metal.

However, Raffi Boyadjian, lead investment analyst at XM, noted that gold appears to be finding a floor following a “brutal week” for the yellow metal.

In U.S. economic data on Friday, the S&P Global “flash” U.S. service sector activity index fell to 54.1 in June from 54.9 in the prior month, a two-month low. Economists surveyed by the Wall Street Journal has forecast a reading of 53.3.

The “flash” U.S. manufacturing sector index, meanwhile, slid to a six-month low of 46.3 from 48.4 in May. Economists had expected a 49 reading. 

See: U.S. economy running close to 2% growth rate in second quarter, S&P says

“The overall rate of expansion of business activity in the
U.S. remained robust in June, consistent with GDP rising at a rate of 1.7% to put second quarter growth in the region of 2%,” said Chris Williamson, chief business economist at S&P Global.

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