Gold futures fell on Friday as the USD rebounded from its lowest level since July 10, according to the latest developments and economic data released Thursday by the US economy, the world’s largest economy and China’s largest consumer of metals worldwide.
Gold futures for December delivery fell 0.24% to currently trade at $ 1,238.00 per ounce compared to the opening at $ 1,241.00 an ounce. The US dollar index rose 0.27% to 94.49, showing a rebound. From its lowest level in more than two weeks compared to the opening at 94.23.
US durable goods sales, which account for almost half of consumer spending, accounting for more than two-thirds of US GDP, rose 1.0% from 0.4% in May, below expectations of a 3.0% rise, The core reading of the index itself showed a 0.4% rise against stability at zero levels, also below expectations of a 0.5% rise.
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The trade balance, which showed a widening deficit to $ 68.3 billion against $ 64.8 billion in May, was worse than the $ 67.0 billion deficit. Compared to a 0.6% rise in May, below expectations for a slowdown in growth to 0.5%.
In the same context, we also followed the weekly reading of the index of requests for assistance, which showed a rise of 9 thousand applications to 217 thousand applications compared to 207 thousand applications, exceeding expectations at 215 thousand applications, while the reading of the requests for continuing assistance for the week of July 14 Down 8K to 1,743K versus 1,753K, higher than expected at 1,733K.
On the other hand, we followed the Chinese economy, the second largest economy in the world and the second largest industrial nation after the United States, to reveal the reading of leading indicators for May, which showed a slowdown in growth to 0.8% compared to 2.2 in the previous reading for April, Last April.
In addition, we have followed this week the World Gold Council revealed its expectations for a rise in the demand for the yellow metal during the second half of the year 2018, due to the high inflation rates and the repercussions of the possible trade war and its impact on currencies, Despite the escalation of global trade tensions, gold did not rise during the first half of this year due to the strength of the US dollar.
The strength of the greenback is due to growing market expectations for a faster rate hike in federal funds this year following the strength of US economic data. The Council noted that demand for the yellow metal is likely to rise in the second half of the year with The tendency to use gold as a tool to hedge inflation, in addition to the recent decline in prices support the increasing demand for gold.
World Gold Council recently reported a 7% drop in global demand for the yellow metal in the first quarter of 2018 to 973.5 mt, the lowest demand since the first quarter of 2008. The decline in demand for gold was led by the sector Investment, explaining that the total investment in the yellow metal fell 27% to 287 metric tons against 393 metric tons in the first quarter of 2017.
World Gold Council also reported that investment in bullion and gold coins also declined in the first quarter by 15%, while central banks’ demand for gold rose 42% to 116.5 mt, particularly with Russia’s demand for yellow metal rising, At 487.7 mt during the first quarter, in conjunction with the growth of the supply of mines 1% on an annualized basis during the last quarter to about 770 metric tons.