Gold inches up as dollar retreats

Andrew Cummings
July 17, 2017

Investors concerned by the prospect of higher interest rates exited in droves -just as the metal capped its biggest weekly advance in six months on dovish United States economic data.

The most active gold contract for August delivery rose 10.2 US dollars, or 0.84 percent, to settle at 1,227.50 dollars per ounce.

U.S. consumer prices were unchanged in June and retail sales fell for a second straight month. It was poised for a weekly gain of 1.3 per cent, the biggest since mid-May.

At the same time as today's PPI data, we get initial jobless claims and Canada's new house price index.

The US data bolstered expectations that the US Federal Reserve would likely to move slowly to continue raising interest rates in the absence of inflation signs.

After Yellen's initial testimony, said Goldman, they see "a 10% probability (vs. 20% previously) that the next rate hike comes in September, 5% in November and 55% (vs. 50% previously) in December".

Fed Chair Janet Yellen's comments to the US Congress this week "were more dovish than originally anticipated", said David Meger, director of metals trading for High Ridge Futures in Chicago.

What makes it especially important is that it's a preview of Friday's CPI data, which is going to be a major report for Dollars. The most-active U.S. gold futures for August delivery futures settled up US$10.20, or 0.84 per cent, at US$1,227.50 per ounce.

For the week, silver is on track for a gain of around 1.5%. The gold price now stands at $1,229.72. The LBMA said it expected IBA to take over the LBMA Silver Price in autumn this year, confirming a Reuters report.

Holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust GLD, fell 0.43 per cent on Thursday from Wednesday.

Excluding the volatile food and energy categories, prices rose 0.1 percent in June and 1.7 percent from a year earlier. Platinum rose 0.6 percent to $906.70 per ounce.

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