Gold trades at three-week high price levels
On July 29, gold prices rose to three-week high price levels amid the weaker dollar. At 1:50 PM EST, the COMEX gold futures contract for December delivery was trading at $1,359.75 per ounce—a gain of ~1.4%. This is a three-week high.
Silver was trading at $20.35 per ounce—a gain of ~0.78%. Read Gold Holds, Silver and Copper Fall the Early Morning on July 29 to learn how metals traded in the early morning hours on July 29.
Disappointing GDP data supported gold prices
According to data released by the U.S. Department of Commerce on July 29 at 8:30 AM EST, the GDP grew at an annual adjusted rate of 1.2% in 2Q16. This is less than the market’s expectation of 2.6% growth. The weaker-than-expected GDP data weakened the US dollar and supported the prices of dollar-denominated commodities like gold.
In the FOMC (Federal Open Market Committee) statement released on Wednesday after the Fed’s policy meeting, the Fed noted that the “near-term risks to the economic outlook have diminished” and the labor market has “strengthened.” Gold prices rose right after the release of the FOMC statement. Most of the market participants took the statement as dovish. The disappointing GDP data released on July 29 supported gold prices. Weaker US economic data decreases the chances of an interest rate hike in the near term. Read Why Gold Is Closely Tied to Interest Rates to learn why interest rates impact gold prices.
At 2:00 PM EST on July 29, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), Silver Wheaton (SLW), and Royal Gold (RGLD) gained ~3.4%, ~3.0%, ~3.1%, and ~2.9%, respectively. The SPDR Gold Trust ETF (GLD) gained ~1.1%.
In the next part, we’ll discuss how copper performed on July 29.