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Gold & Silver futures - Weekly outlook (October 2 - 6)

Tuesday, October 3, 2017

Gold prices ended lower Friday as weak U.S. consumer spending and inflation data did little to alter expectations for a third interest rate increase by the Federal Reserve this year.

Gold futures for December delivery settled down 0.41% at $1,283.47 on the Comex division of the New York Mercantile Exchange, after falling as low as $1,278.20 earlier.

Friday’s losses meant that the precious metal ended the week down 0.98%, helping gold post a monthly loss of 2.83%, its largest monthly decline so far this year as the dollar strengthened.

The dollar has risen in recent weeks as investors grow more optimistic about the prospect for U.S. rate hikes and tax cuts that some expect to boost the U.S. economy.

Data on Friday showed that U.S. consumer spending barely rose in August. Inflation also remained sluggish with the core personal consumption expenditures price index rising 1.3% year-on-year, slowing from 1.4% in July.

The core personal consumption expenditures price index is the Fed’s preferred inflation measure and has a 2% target.

The data did little to temper rate hike bets after Fed Chair Janet Yellen indicated earlier in the week that the central bank was sticking to plans for a third rate hike this year and three in 2018.

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.

Elsewhere in precious metals trading, silver was at $16.68 a troy ounce late Friday, while platinum settled at $915.30. Palladium added on 0.82% to $935.50 a troy ounce.

In the week ahead, comments by Fed Chair Janet Yellen will be closely watched for further hints on the timing of the next rate hike. Friday’s U.S. jobs report will also be in focus.

Market watchers will be looking ahead to remarks by European Central Bank President Mario Draghi on Wednesday, while UK PMI data will offer further insight into the economic impact of Brexit.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

 

Monday, October 2

Financial markets in China will remain closed for a holiday.

Japan is to publish its Tankan manufacturing and non-manufacturing indexes.

The UK is to release data on manufacturing activity.

In the U.S., the Institute for Supply Management is to publish its manufacturing index.

Federal Reserve Bank of Dallas President Robert Kaplan is to speak.

 

Tuesday, October 3

Financial markets in China will remain closed for a holiday.

Australia is to release data on building approvals.

The Reserve Bank of Australia is to announce its benchmark interest rate and publish a rate statement which outlines economic conditions and the factors affecting the monetary policy decision.

Financial markets in Germany will be closed for a holiday.

The UK is to release data on construction activity.

Fed Governor Jerome Powell is to speak at an event in Washington.

 

Wednesday, October 4

Chinese financial markets will be closed for a holiday.

The UK is to release data on service sector activity.

The U.S. is to release the ADP nonfarm payrolls report for September, while the ISM is to release its non-manufacturing PMI.

ECB head Mario Draghi is due to speak in Frankfurt.

Later in the day, Fed Chair Janet Yellen is to speak at an event in St. Louis.

 

Thursday, October 5

Chinese financial markets will be closed for a holiday.

Australia is to release data on retail sales and the trade balance.

The ECB is to publish the minutes of its latest meeting.

Canada is to release data on the trade balance.

The U.S. is to release a string of reports, including figures on jobless claims, trade and factory orders.

Fed Governor Jerome Powell and Philadelphia Fed President Patrick Harker are both due to speak at an event in Austin.

 

Friday, October 6

Financial markets in China will remain closed for a holiday.

The UK is to release private sector data on house price inflation.

Canada is to publish its monthly employment report along with the Ivey PMI.

The U.S. is to round up the week with the non-farm payrolls report for September

New York Fed President William Dudley and Dallas President Robert Kaplan are also to speak.

Source: UKInvesting.com

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