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What’s happening: Gold prices gained more than 1% on Thursday amid weakness in the US dollar.
What happened: The US released downbeat economic data on Thursday, lending support to the yellow metal.
Russian President Vladimir Putin not attending peace talks with Ukraine resulted in safe-haven buying by investors.
Why it matters: Data released on Thursday showed producer prices in the US unexpectedly declined in April, while retail sales growth eased.
US producer price inflation fell to 2.4% year-over-year in April, from 3.4% in the previous month. The figure also came in below market estimates of 2.5%.
Meanwhile, US retail sales grew by just 0.1% in April, decelerating from March’s 1.7%, with consumers cutting back on spending due to several tariff announcements by the Trump administration.
Earlier in the week, a report showed a lower-than-expected increase in US consumer prices in April.
Increased speculations of the Federal Reserve cutting its benchmark interest rates by September exerted pressure on the US dollar and provide a boost to gold’s appeal.
Russia’s President Vladimir Putin did not show up for peace talks with Ukraine in Turkey and instead, sent a second-tier team of negotiators. This move somewhat lowered the prospects of progress towards an agreement, providing a further boost to safe-haven purchases.
Weakness in the US dollar lent support to gold prices as a lower greenback makes metals cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.1% on Thursday.
US gold futures gained 1.2% to close at $3,226.6 an ounce on Thursday.
In other metals trading, silver rose to $32.68 an ounce, copper settled higher at $4.6835, platinum rose to $995.40 and palladium closed higher at $967.00.
What to watch: Investors will continue monitoring global trade tensions, which are expected to significantly impact gold prices ahead. Although the US and China have agreed to a tariff deal for 90 days, investors remain cautious over the trade outlook.
Peace talks between Russia and Ukraine will also remain in focus and are expected to provide further direction to the bullion’s price.
Context: Equity markets in Europe settled higher on Thursday as investors digested the latest economic and earnings reports.
Details: Data released on Thursday showed the Eurozone economy expanding by 1.2% year-over-year in the first quarter, unchanged from the previous quarter’s pace. Meanwhile, the UK economy grew by 1.3% year-over-year in the first quarter, decelerating slightly from the 1.5% gain recorded in the previous quarter.
The Eurozone’s industrial production jumped 2.6% in March, following 1.1% growth in February.
On the corporate front, Deutsche Telekom’s stock climbed around 3% on Thursday after the company raised its guidance for the full year. Shares of Thyssenkrupp fell more than 12% after the industrial giant reported downbeat results.
The STOXX Europe 600 Index gained 0.56% to close at 546.95 on Thursday. London’s FTSE 100 rose 0.57% to settle at 8,633.75, while Germany’s DAX 40 and France’s CAC 40 added 0.72% and 0.21%, respectively.
What to watch: Investors await the release of economic data on Eurozone’s balance of trade (1300 UAE Time) today. The Eurozone, which recorded a trade surplus of €24 billion in February, is expected to report a wider surplus of €25 billion in March.
Other Markets: Asian indices traded lower this morning, with Japan’s Nikkei 225, China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index down by 0.46%, 0.59% and 1.03%, respectively.
Russia’s defence ministry said military forces had captured two villages in the eastern Donetsk region of Ukraine. The news sent the RUB/USD pair higher in forex trading this morning.
Singapore’s non-oil domestic exports jumped by 12.4% year-over-year in April, following a 5.4% gain in the previous month. The latest reading topping market expectations of a 4.0% rise lent support to the SGD/USD forex pair.
South Korea’s export prices rose by 0.7% year-over-year in April, after a 6.3% surge in the previous month, which sent the KRW/USD pair lower in forex trading this morning.
The Bank of Mexico slashed its key rate by 50 bps to 8.50%, exerting pressure on the MXN/USD forex pair.
New Zealand’s BusinessNZ performance of manufacturing index rose to 53.9 in April, from 53.2 in the previous month. However, the NZD/USD pair edged lower in forex trading this morning.
Italy’s inflation rate (1200 UAE Time) and balance of trade (1300 UAE Time), India’s foreign exchange reserves (1530 UAE Time), Canada’s foreign securities purchases (1630 UAE Time) and senior loan officer survey (1830 UAE Time), US building permits (1630 UAE Time), housing starts (1630 UAE Time), export prices (1630 UAE Time), import prices (1630 UAE Time), Michigan consumer sentiment (1800 UAE Time), Michigan consumer expectations (1800 UAE Time), Michigan current conditions (1800 UAE Time), Michigan inflation expectations (1800 UAE Time), Baker Hughes oil rig count (2100 UAE Time) and Baker Hughes total rigs count (2100 UAE Time), as well as Russia’s balance of trade (1700 UAE Time), GDP growth rate (2000 UAE Time) and inflation rate (2000 UAE Time).
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