Gold Stable After China Inflation and Strong US Employment

Gold prices are moderately higher in early U.S. trading Thursday. Short covering in the futures market and bargain hunting in the cash market are featured. There is also less risk appetite in the marketplace on this day, which is favorable to the safe-haven metal. December Comex gold was last up $6.60 at $1,108.50 an ounce. December Comex silver was last up $0.089 at $14.665 an ounce.

The latest U.S. weekly jobless claims data showed claims fell by 6,000 in the latest week, which was in line with trade expectations, but still falls into the camp of the U.S. monetary policy hawks. Gold prices were not impacted by the report.

World stock markets were mostly lower overnight, as uncertainty about the outcome of next week’s U.S. FOMC meeting has moved to center stage and is causing a bit a trader and investor anxiety. The Federal Open Market Committee meets next Tuesday and Wednesday to discuss monetary policy. There is no clear consensus among traders and investors on whether the Fed will make an interest rate hike for the first time in several years at next week’s meeting, or wait until December, or later.

China’s Shanghai stock index closed down 1.4% Thursday. Japan’s Nikkei stock index was down 2.5% on the day. European stock markets were also weaker Thursday. U.S. stock indexes were firmer in preopening trading, after posting solid losses Wednesday.
China’s consumer price index rose 2.0% in August, year-on-year, which was stronger than expected. However, China’s August producer price index fell 5.9% from a year ago, which was worse than expectations.

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza