Gold tries to snap 4-day losing streak, but weekly loss looms
Gold futures are inching higher in early trade, aiming to snap a four-day losing streak Friday. But the metal is still on track to post its worst weekly loss in about a month.
Gold for December delivery GCZ5, +0.54% gained $2.10, or 0.2%, to $1,124.70 an ounce in early trade, and was eyeing a 3% loss-its worst weekly decline since July 24, when the precious metal slid 4.1% for the week.
Several factors are weighing on the yellow metal. Thursday's stronger-thanexpected gross domestic product report suggests the U.S. economy may be on better footing than the market has feared. Analysts speculate that despite globalmarket turmoil fueled by China-the world's second-largest importer of commodities-the Federal Reserve may still find cause to lift interest rates sooner than later.
Higher rates would be a boon for the U.S. dollar but may dim the appeal of dollar-denominated gold for buyers purchasing the asset in other currencies. Another event investors are watching is the Jackson Hole summit, where Fed officials are expected to drop clues about the U.S. central bank's likelihood of hiking rates just weeks ahead of the key two-day meeting of the Federal Open Market Committee starting Sept. 16.
"Uncertainty lingers as the September FOMC meeting looms," wrote UBS analysts Edel Tully and Joni Teves in a Friday research note. Personal-consumption expenditures, a measure of inflation, was at its lowest level since March 2011, according to a report by the Commerce Department. UBS says the report "will be important amid concerns about subdued inflation." Gold held on to its gains after the PCE data were reported Friday at 8:30 a.m. Eastern.
In other metals, September silver SIU5, +0.33% gave up a penny, or less than 0.1%, to trade at $14.41 an ounce, and is on track for a weekly loss of 5.8%, its worst weekly loss since Feb. 20, when the metal skidded about 5.9% for the week.