Gold prices continue to head south, as the base metal has recorded losses in five of the past six sessions. In Thursday’s North American trade, the spot price for an ounce of gold is $1317.27, down 0.42% on the day. On the release front, durable goods orders reports were mixed. Core Durable Goods Orders fell to 0.0%, missing the estimate of 0.5%. There was better news from Durable Goods Orders jumped 2.6%, crushing the estimate of 1.6%. Unemployment Claims dropped to 209 thousand, well below the estimate of 230 thousand. On Friday, the US releases Advance GDP and UoM Consumer Sentiment. Traders should be prepared for some movement from gold during the North American session on Friday.
The US dollar continues to shine, and gold has dropped to its lowest level since March 21. Much of the dollar rally can be attributed to rising yields on US bonds, which have hit 4-year highs this week. On Wednesday, 10-year US Treasury notes climbed to 3.015%, and 2-year bonds have increased to 2.504 percent. With inflation appearing to be on the rise, there are stronger expectations that the Federal Reserve will raise rates four times in 2018, which is good news for the US dollar. With oil pushing above $70 a barrel, there are concerns that inflation will rise, which has pushed bond prices lower and yields upwards. At the same time, investor risk appetite has improved, with an easing of tensions between North and South Korea. A historic meeting between the leaders of the two countries is expected shortly, and there is even talk of a peace treaty being signed between the two countries.
