Precious Metals Down But Gold Consolidates Up Ahead of Fed Meeting

After sliding one percent in the previous session, gold saw a bit of a rebound at the end last week thanks to solid US jobs data.  Fortunately, gross domestic product in the US, in the second quarter, turned out to be better-than-expected, bolstering strong consumer sentiment. 

On that note, spot gold rose 0.29 percent, to $1,418.21 per ounce.  This also helped buoy US gold futures, now up 0.28 percent, to $1,418.7 per ounce. 

That said, gold prices were still on track to take its first weekly dip in three weeks. This was to be expected after the lower outlook announced from European Central Bank Governor Mario Draghi, which look to immediately cut their interest rates, resulting in a stronger US dollar and some carry-over from the slide on Thursday.  Accordingly, Draghi wanted to warn that too much ambition on policy easing might be hasty, though he seems quite ready to loosen monetary policy if outlook continues to deteriorate. 

Of course, we also have to take into consideration the escalating trade war between the United States and China.  Many entities are concerned that respective capitols Washington and Beijing will not be able to sort out their differences in a meaningful way that will definitely quell investor anxiety.  Negotiators from each side are still planning to meet next week, so all proverbial fingers are crossed for now. 

A gold recovery would be quite an important moment in time right now as many other precious metals are in decline.  Platinum, for example, saw a 0.2 percent dip—to $863.50 per ounce—and silver slid 0.3 percent, to $16.35.  Copper also dropped by 0.4 percent, to $2.694 a pound.  Palladium managed to remain flat.  

It should be noted that silver was actually on track to hit its third week of gains, having increased 1.4 percent—and futures are up $16.503—until this week. That said, the market is now focusing its attention on the Fed meeting, next week. The outcome of this meeting, of course, will help to determine the direction these commodities will go, particularly since many expect the US dollar to depreciate.