Yesterday was a critical day for the precious metal. On Wednesday, an important report - the minutes of the US Federal Reserve's April meeting - was published.
Immediately after the release, gold began to lose ground although it had been showing steady growth for 5 consecutive sessions before the event. Fears that the Fed will tighten its monetary policy earlier than expected reversed the trend on gold. The regulator intends to change the policy in case of a strong economic recovery.
If such measures are taken, the US dollar will definitely strengthen which is a bearish factor for the yellow metal. If the greenback rises, gold becomes less affordable for holders of other currencies.
Following the panic, the yellow metal was falling during the whole day but was able to stop in time after digesting the information. The prospect of curtailing monetary stimulus is still dim, and according to the minutes, the Fed does not yet have a clear plan regarding this matter.
This kind of uncertainty was a big boost for gold. Towards the end of the session, the quotes began to grow rapidly. Even the partially optimistic data from the US labor market could not prevent gold from rising.
Last week, the number of initial jobless claims in the US fell by 34,000. Thus, the indicator reached its lowest value since the beginning of the pandemic last year – 444,000. This figure is even lower than predicted by experts from Wall Street.
At the same time, the number of secondary jobless claims increased by 111,000, reaching 3.75 million. As you can see, the data is rather contradictory and, therefore, could not exert strong pressure on gold prices.
On Thursday, the yellow metal closed the session on COMEX at $1,881.90. Given the losses incurred throughout the session, the gold gained modest 40 cents or 0.02%.
The symbolic growth allowed the main precious metal to continue its winning streak. Gold has been reporting gains for 6 sessions in a row. This is the longest growth of the asset this year, as well as on July 29, 2020. Back then, the quotes showed positive dynamics for 9 days in a row.
Whether gold will be able to extend its current rally is still a big question. On Friday morning, it went down again. So, at the time of writing, gold fell by 0.26% to $1,877.05.
Analysts believe that now the price is under pressure from optimism about the recovery of the US economy. It was reported that the CB leading index showed the most positive dynamics since July 2020.
The indicator increased by 1.6% against a rise of 1.3% in March. According to experts, growing hopes for an economic recovery increase the attractiveness of risk assets but not gold.
At the same time, the US dollar weakness and rising inflationary pressure this week kept gold on track for its third weekly gains. During this seven-day period, gold rose in price by 1.8%.
The precious metal has historically been considered the most reliable safe-haven asset against inflation, and its attractiveness may increase significantly in the second half of the year.
At least, the Fed does not deny that it will be difficult to neutralize some inflationary factors by the end of the year, and they will continue to provoke further price increases. This is stated in the minutes of the Fed's April meeting.
Meanwhile, the rest of the metals traded on the COMEX closed mixed on Thursday. Silver was up by 0.2% to hit $28.07. Platinum also finished the session in positive territory. It has risen in price by 0.3% and reached $1,205.
Copper and palladium were among the outsiders yesterday. Copper slipped by 0.2% to close at $4.57 per pound, while palladium lost 0.5% in value, reaching $2,879.40.
