- Trading Just Below Key $1900 Level
- Slight Dips in Finishing Broadly Positive Month
- Many Remain Unconvinced by Fed Stance
In commodities news, gold is approaching the end of the week slightly lower than it has been in previous days. Silver too has dipped slightly moving into the European trading session. The former is still trading close to $1890 though and has gained an impressive amount over the course of the month. The key point that is the focus for those trading precious metals today is any further indications surrounding the inflation question. A good gauge of this may come later with the PCE Price Index that many in commodities and gold trading will look out for as a strong indicator.
Positive Trading Continues at High Levels
Although it has slipped from higher levels above $1900, gold still remains positive for the week at well supported at the current prices having tested only slightly lower. Durable Goods data from the US yesterday has seen the upside limited by a certain amount of selling pressure as durable goods orders declined a total of 1.3% in April. This was slightly more than expected and gave the market a little pause for thought on precious metals.
Pricing has managed to hold steady this morning though around the $1880 point and above as a host of data comes in from Europe and in particular, Germany where April import prices rose more than had been predicted by analysts. Silver too has seen some selling with the price dropping below $28 per ounce but as with gold, remaining well supported at these levels.
Bright Month Overall for Precious Metals
Despite the downward movements of the morning, the shine cannot be taken from what has been an all-around very positive month for gold prices in general. Having started out the month below $1800 they are now challenging $100 higher and could move higher still depending on how those trading interpret the data released later.
Many analysts believe it has room to run higher if the conditions remain in place. This has been illustrated today by those at Credit Suisse who have set a higher price target for the metal. They believe it has the potential to test its current all-time high level of $2075 though this will be highly dependent on both fed policy and the economic roadmap ahead.
Reserving Judgement on Policy
With policy in mind, the Federal Reserve has made it clear this week that they are sticking firmly by the viewpoint that any inflationary pressures will be transitory, and they will remain committed to both allowing it to run, and retaining the current low rate environment.
This has gone down well with equities, but many commodities traders are reserving judgment. This can be seen as treasury yields tick higher. Expect the release of PCE Price Index data today to move the charts with the potential to put the ball back in the court of the Fed.