Gold Briefly Rises Above $ 1,800 As US GDP Disappoints

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Gold futures were trading slightly higher on Friday morning, breaking through a psychologically significant level at $ 1,800 that the precious metal has struggled to hold above in recent weeks.

December or GCZ21,
+ 0.11%
GC00,
+ 0.11%
was up $ 3.80, or 0.2%, to $ 1,802.60 an ounce, following a 0.3% gain on Wednesday. The last time the yellow metal settled around $ 1,800 was September 14, according to FactSet data.

Gold edged down after a disappointing third quarter U.S. gross domestic product report, up 2%, compared to economists’ average estimate of 2.8% and a second quarter reading of 6.7% .

Bullion has been mostly dynamic, rising in four of the past five sessions, despite some weak appetite for gold.

According to a World Gold Council report released on Wednesday, total global gold demand fell year-over-year in the third quarter, with investment in the precious metal falling by more than 50%, due to a quarterly gold release. backed by exchange-traded funds.

Part of that decline was the result of outflows from global exchange-traded funds, which recorded outflows of 26.7 metric tonnes, according to the WGC.

Silver futures for delivery in December SIZ21,
-0.46%

SI00,
-0.46%,
meanwhile, it gained 5 cents, or 0.2%, to $ 24.24 an ounce, after settling 0.4% higher a day ago.

Metal prices held steady on Thursday after the European Central Bank, as expected, left its monetary policy measures unchanged, saying it would continue to buy assets through its emergency pandemic purchase program at a slower pace than in the second and third trimesters.

Gold prices fell briefly on Wednesday as the Bank of Canada announced it was ending its quantitative easing program, with a view to potentially raising interest rates. However, lower yields, with the 10-year Treasury and 30-year bond experiencing their biggest yield drops in three months, helped support bullion buying.

The ECB’s more accommodating stance on monetary policy could help keep gold prices on the rise, strategists said.

“Gold investors are realizing that major central banks as a whole are unlikely to tighten monetary policy too aggressively, even if inflation remains high,” Fawad Razaqzada, market analyst at ThinkMarkets, wrote in a note. from Thursday.

“The reason is that there is still a lot of spare capacity in the economy and the impact of temporary factors will ease in the coming months, leading to a cooling of inflation and reducing the need for banks. powerhouses to tighten aggressively, ”Razaqzada wrote.


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