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What’s happening: Gold prices settled higher on Friday and recorded gains for the week.
What happened: China’s stimulus measures and increased speculations of the US Federal Reserve’s interest rate cuts provided a boost to gold prices.
Silver also recorded gains, moving past the key $30 resistance level to surge to an 11-year high on Friday.
Why it matters: China, which is one of the major consumers of metals, announced measures to stabilise its crisis-hit property sector, driving gold prices higher.
London’s gold price benchmark also settled at a record high of $2402.60 per troy ounce last week, according to the London Bullion Market Association.
Growing speculations of US inflation rate coming under control fuelled prospects of interest rate cuts by the Federal Reserve. Lower rates increase the appeal for the non-yielding bullion. Data released last week showed US consumer prices had increased 0.3% in April, below market expectations of a 0.4% rise. The annual inflation rate also eased to 3.4% in April, from 3.5% in the earlier month.
Some strength in the US dollar limited the overall gains in gold, as a higher greenback makes metals more expensive for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, added around 0.1% to 104.50 on Friday.
Gold for June delivery gained $31.90 to close at $2,417.40 per ounce on Friday, adding around 2.2% last week.
Silver for July delivery surged $1.38 to $31.26 per ounce on Friday, after spiking past the major resistance mark of $30.
In other metals trading, July copper added 17 cents to settle at $5.05 per pound on Friday. Platinum surged more than 2% to 1,090.0, after rising to a one-year high on Thursday. The metal gained around 9% last week amid continued structural deficits. Palladium also added more than 1% to reach $1,010.80.
What to watch: Investors will continue monitoring speeches from Fed officials and some major economic reports.
Context: Shares of Applied Materials edged lower on Friday, despite the company reporting upbeat results for its fiscal second quarter.
Details: Investors had been keenly awaiting results from Applied Materials to get deeper insights into the trend of recovery in chips, as the company is a major supplier to some of the biggest manufacturers, including Intel, Samsung and Taiwan Semiconductor.
The company said it is seeing an increase in demand for machines that are used to manufacture AI processors.
Applied Materials’ second-quarter revenue came in flat on a year-over-year basis at $6.646 billion, topping the consensus estimates of $6.537 billion. The company reported quarterly adjusted earnings of $2.09 per share, exceeding Wall Street expectations of $1.99 per share.
“Applied Materials has the most enabling portfolio of materials engineering technologies for chips that underpin tectonic shifts in technology including AI, IoT, electric vehicles and clean energy, which puts us in a great position to grow along with these long-term, secular trends,” CEO Gary Dickerson said.
Management guided to third-quarter revenue of $6.65 billion, plus or minus $400 million, and adjusted earnings of $1.83 to $2.19 per share.
How shares responded: Shares of Applied Materials slipped 0.9% to close at $212.08 on Friday, following the release of quarterly results. The stock has gained around 12% over the past month.
What to watch: Investors will continue assessing demand for chipmaking machinery, which is expected to significantly impact the company’s overall results ahead.
Other Markets: European indices closed lower on Friday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index down by 0.22%, 0.18%, 0.26% and 0.13%, respectively.
Russia bombed a lakeside resort on the edge of Ukraine’s Kharkiv, killing at least 11 people. The news sent the safe-haven US dollar index higher in forex trading this morning.
Thailand’s GDP grew by 1.5% year-over-year in the first quarter, topping market expectations of 0.8%, which lent support to the THB/USD forex pair.
The People’s Bank of China maintained its key lending rates at the May fixing, which sent the CNY/USD pair lower in forex trading this morning.
Russia’s annual inflation rate rose to 7.8% in April, from 7.7% in the previous month, exerting pressure on the RUB/USD forex pair.
Kuwait’s annual inflation rate accelerated to 3.17% in April, from 3.02% a month ago. However, the KWD/USD pair rose in forex trading this morning.
Italy’s construction output, Spain’s balance of trade, Mexico’s retail sales, China’s foreign direct investment, Spain’s consumer confidence indicator, Central Bank of Brazil’s focus market readout, as well as Argentina’s leading economic index.
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