Gold Gains on Hotter-Than-Expected US Inflation AND Jobless Claims
Thursday, 10/10/2024 16:23
GOLD PRICES fell and then jumped Thursday lunchtime in London as new US data said inflation is running hotter than analysts expected, but so too are claims for unemployment benefits.
Tensions meantime grew between Israel and its allies at the United Nations over Jerusalem's military actions in Gaza and Lebanon, while China's stock market steadied after the past month's 33% surge and then 7% plunge on yet another press conference being announced on
economic stimulus by Beijing's Communist government, this one
scheduled for Saturday.
Dropping to $2610 on Thursday's US data releases – just $5 above yesterday's 3-week low – the price of gold then jumped to $2625 per Troy ounce, cutting its drop from last weekend to 1.0% against a rising US Dollar.
That saw gold rally harder in non-US currencies, more than erasing this week's prior fall in Canadian and Aussie Dollars, while reclaiming the €2400 level for Euro investors and hitting
a UK gold price in Pounds per ounce of £2013.
"I continue to see a meaningful risk that inflation could get stuck above our 2% goal," said Dallas Federal Reserve Bank President Lorie Logan – not a voting member of the FOMC until 2026 – in a speech last night.
"We should not rush to reduce the Fed funds target" interest rate, Logan said – a view backed by today's CPI data for September defying analyst forecasts by slowing only from 2.5% to 2.4% per year on the headline measure while core inflation, excluding fuel and food, accelerated to 3.3%.
But a growing number of US adults are now without work, with the latest weekly data for initial and continuing claims for jobless benefits today heading towards the highest levels in almost 2 years and raising a question-mark over last
Friday's stellar non-farm payrolls report.
"As risks to inflation have diminished...risks to employment have risen [coming] roughly into balance," said the US central bank's Vice Chair Philip Jefferson
in a speech Tuesday.
That repeats
the view of "almost all participants" at last month's half-point Fed rate-cut meeting, minutes from that decision showed when released on Wednesday.
Israeli troops fighting Iran-backed Hezbollah in southern Lebanon meanwhile fired at two sets of United Nations' peacekeeping troops on Thursday, with a tank shooting at the Naqoura HQ of the UN's "interim" force – established in 1978 – after
"deliberately" targeting its position in Labbouneh yesterday.
With 600,000 Lebanese
internally displaced by Israel's offensive, "Israel
must ensure that humanitarian workers can operate safely," said the UK's representative to the United Nations on Wednesday.
The US ambassador also called on Jerusalem to stop "intensifying suffering" in Gaza, urging it to
address the "catastrophic conditions" for 2 million Palestinians estimated to have been displaced by Israel's war with Hamas – almost the entire population – since the Iran-backed militia murdered 1,200 Israelis and kidnapped another 254 on 7th October, 2023.
Crude oil rallied today after dropping 7.1% from Tuesday's 6-week highs on
Hezbollah saying it's willing to enter truce talks.
Western stock markets slipped following the US jobs and inflation numbers, while market forecasts for US Fed interest rates eased back, but only by 2 basis points to 4.40% for year-end.
That forecast – based on trader positioning in Fed Funds futures contracts – has risen by nearly 25 basis points already in October, according to data from
the CME derivatives exchange's FedWatch tool, and it now stands in line with
the US central bank's own end-2024 interest rate projection.
Longer-term interest rates also slipped Thursday in the bond market, but only after benchmark 10-year US Treasury yields had set a fresh 11-week high at 4.10% per annum.
That was fully half-a-point above mid-September's drop to spring 2023 levels, made as the US Fed finally commenced its new rate-cutting cycle.
Silver today rebounded with gold prices, briefly nearing $31 per Troy ounce and heading into the London close 2.5% above Tuesday's 3-week low in US Dollar terms.
"These are the steps that will
create the best conditions for restoring a just peace," said Ukraine's President Zelensky today of the 'victory plan' against Russia's invasion which he's proposing to European allies – alongside appealing for further Nato military aid – in a whistle-stop tour after the planned launch in Germany was derailed by Hurricane Milton keeping US President Biden from joining.
The Council of the European Union agreed Wednesday to give Kyiv a loan of up to €35 billion backed by frozen Russian central bank assets, calling it
"exceptional macro-financial assistance" to bypass objections Viktor Orban's Hungary by needing only a qualified majority rather than unanimous vote.
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