Spot gold at $4,220 ahead of US inflation data

Today’s headlines

What’s happening: Gold prices settled higher on Thursday amid weakness in the US dollar.

What happened: Investors remained cautious after the US reported mixed labour market data.

Markets await the release of the US inflation rate to get more insights into the Federal Reserve’s monetary policy outlook.

Why it matters: Data released on Thursday showed that new US jobless claims declined to 191,000 in the latest week, hitting the lowest level in more than three years. The figure also came in better than market estimates of 220,000 new jobless claims.

Meanwhile, ADP data released on Wednesday showed US private payrolls declining by 32,000 in November. This marked the steepest decline in over 2.5 years. Consulting firm Challenger announced 71,321 layoffs in the month, citing restructuring, AI adoption and the impact of tariffs.

Markets continue to expect the Federal Reserve to cut its key interest rates by 25 basis points at its upcoming meeting to support softness in the labour market. Lower rates generally provide a boost to non-yielding assets like gold.

Weakness in the US dollar lent further support to gold, as a softer greenback makes metals more affordable for foreign buyers. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell to a one-month low on Thursday.

US gold for February gained 0.2% to settle at $4,243.00 per ounce on Thursday.

In other commodities, silver declined to $57.491 per ounce, after hitting a record high of $58.98 in the previous session. The white metal has almost doubled in value this year, driven by supply deficit and its inclusion in the US list of critical minerals. Platinum settled at $1,660.6, while palladium closed at $1,484.00 on Thursday.

What to watch: Data on Personal Consumption Expenditures, the Fed’s preferred inflation gauge, will be released today (1900 UAE Time). PCE prices in the US, which surged 2.7% year-over-year in August, the highest in six months, are expected to jump by 2.8% in September.

Investors will also keep an eye on the movement in the US dollar and any outcome of the talks between the US and Russia.

The markets today

Hewlett Packard Enterprise (HPE) in focus today after releasing results for its fiscal fourth quarter

Context: Shares of HPE tumbled in after-hours trading on Thursday despite the company reporting better-than-expected quarterly earnings.

Details: Hewlett Packard Enterprise’s revenue surged 14% year-over-year to $9.68 billion, missing consensus estimates of $9.94 billion. Adjusted earnings came in at 62 cents per share, topping Wall Street expectations of 58 cents per share.

Revenue growth was driven by a 150% surge in networking revenue. However, server revenue declined 5% and hybrid cloud revenue dipped 12% during the quarter. Financial services revenue came in flat.

“HPE continued to drive operational discipline in Q4, resulting in record gross profit and robust non-GAAP operating profit as well as free cash flow generation that exceeded our outlook,” CFO Marie Myers said.

The company witnessed a decline in AI server income, with ‌customers deferring orders to the second half of the year. This led to the company guiding to disappointing revenues for the current quarter.

For its fiscal first quarter, the company guided to revenues of $9-$9.4 billion, lower than market expectations of $9.90 billion. The company projected adjusted earnings of 57-61 cents per share, above market estimates of 54 cents per share.

HPE guided to fiscal 2026 revenues of $40.13-$41.84 billion, higher than consensus of $34.55 billion. The company raised its full-year adjusted earnings forecast to $2.25-$2.45 per share, from its previous outlook of $2.20-$2.40 per share.

How shares responded: HPE’s shares fell 9.3% to $20.77 in extended trading hours on Thursday, following the release of quarterly results. The stock has jumped around 28% over the past six months.

What to watch: Investors will continue monitoring the rising AI adoption, which could provide a boost to the company’s overall results ahead.

Other Markets: European indices closed higher on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.19%, 0.79%, 0.43% and 0.45%, respectively.

The news shaping the markets

Ukraine’s military denied claims that Russian troops had taken control of the southern village of Dobropillia. The news sent the RUB/USD pair lower in forex trading this morning.

Japan’s foreign reserves surged by $11.98 billion to $1.36 trillion in November. This being the highest reading since March 2022 lent support to the JPY/USD forex pair.

Brazil’s gross domestic product grew by 0.1% during the three months to September, easing from a 0.3% expansion in the second quarter. The latest reading falling short of market estimates of 0.2% sent the BRL/USD pair lower in forex trading this morning.

Ireland’s current account surplus fell to €13.9 billion in the third quarter from €19.7 in the year-ago period. However, the merchandise surplus rising to €55.4 billion, from €42.9 billion last year, lent support to the EUR/USD forex pair.

UK’s S&P Global construction PMI declined to 39.4 in November from 44.1 in the previous month. However, the GBP/USD pair rose in forex trading this morning.

What else to watch today

Japan’s Reuters Tankan Index (1200 UAE Time), Spain’s industrial production (1200 UAE Time), Italy’s retail sales (1300 UAE Time), Eurozone’s employment change (1400 UAE Time) and GDP growth rate (1400 UAE Time), India’s foreign exchange reserves (1530 UAE Time), Brazil’s PPI (1600 UAE Time), Mexico’s consumer confidence (1600 UAE Time), Russia’s foreign exchange reserves (1700 UAE Time), Canada’s unemployment rate (1730 UAE Time), employment change (1730 UAE Time) and average hourly wages (1730 UAE Time), as well as US Michigan consumer sentiment (1900 UAE Time), personal income (1900 UAE Time), personal spending (1900 UAE Time) and Baker Hughes total rigs count (2200 UAE Time).