Gold Off Record, Silver Slides on US Jobs and Inflation Beat, Weak GDP
Wednesday, 10/30/2024 14:43
GOLD PRICES slipped from fresh record highs and silver prices sank Wednesday lunchtime in London as new US data said the world's largest economy added more jobs than analysts guessed in October, but GDP grew less quickly than expected in the third quarter of 2024 as inflation held firmly above the Federal Reserve's 2.0% target.
World No.2 economic zone the Euro-area meantime beat analyst forecasts with its first estimate of Q3 GDP, but inflation in Germany – the 350 million-citizen currency union's largest economy – blew past analyst forecasts for October.
Following yesterday's
volatile US data ahead of next week's presidential election and Federal Reserve policy meeting, betting on the next move in interest rates by the European Central Bank and the US Fed was little moved on today's statistics, while longer-term rates in the bond market slipped again from Monday's multi-month highs.
But after peaking above $2789 per Troy ounce and then setting a new London benchmark record for the 38th day of 2024 so far above $2783 at 10:30 this morning, the price of gold dropped 0.6% in spot-market trade following the US and Eurozone GDP and inflation stats.
Silver bullion prices were already trading 1.6% below last week's fresh 12-year high, and it then sank another 2.5% to erase this week's rally at $33.41 per ounce before rebounding by 40 cents.
"The net long silver speculative position on Comex was at a two-and-a-half-year high last week," says analysis from Rhona O'Connell at brokerage StoneX, looking at hedge-fund and other 'Managed Money' positions in CME silver futures contracts.
"With prices steadying [already this week] it is likely that some of this length has been reduced but it is large enough to point to the risk of a sell-off should gold's momentum start to dissipate.
"That said, the position is nowhere near what it looked like" in the late 2010s.
Economic growth in the Eurozone – which now gets 4/5ths of its
silver-based solar-panel PV technology from
Chinese imports – was reported at 0.9% per year on Eurostat's first estimate for July-to-September today, aided by gross domestic product in No.1 driver Germany shrinking less than analysts expected at 0.2%.
Euro gold prices peaked at a new all-time high of €2578 per Troy ounce before dropping 0.7% after that data – the strongest annual pace of GDP growth since Q1 2023 across the 20-nation region and 0.1 points ahead of consensus forecasts.
US growth in contrast slowed from Q2's annualized pace of 3.0% to show GDP expanding only 2.8% faster than economy-wide price inflation, which itself slowed from 2.6% to 2.2% per year.
But consumer-price inflation on the core PCE measure held firm at 2.7%, unchanged from Q2's pace, still above the Fed's 2.0% target and stronger than analysts' consensus forecasts.
US jobs growth also beat the Street on today's ADP Payrolls estimate for October, rising to 233,000 against forecasts of just 115,000.
The
UK gold price in Pounds per ounce meantime rose to new record highs as Labour Chancellor Rachel Reeves began delivering the new Government's first Budget, hitting £2150 for the first time in history.
But while the price of gold for UK investors has now risen by 16.6% since the eve of Labour's election victory on May 2nd, the precious metal has risen faster against other currencies, adding 19.4% in Euro terms and 20.8% in the US Dollar.
London's FTSE All Share index fell 0.5% towards a 3-month low, losing 2.9% from the record high hit within 2 weeks of Labour's election victory.
UK government bond prices rose, in contrast, edging the state's borrowing costs almost 10 basis points lower from yesterday's 4.5-month peak of 4.32% on 10-year Gilts.
That yield ended the previous Conservative administration at 4.37% per year,
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