Gold futures weekly recap, July 28 – August 1

Gold futures were pressured lower this week, after the Fed kept on track to reduce the inflow of government funds into the US economy, supporting the dollar. Stocks slumped these past five sessions, while other precious metals also closed significantly lower.

Gold futures for delivery in December added 0.94% on Friday, closing at $1 294.8 per troy ounce, about 0.8% down for the week. Weekly high and low were at $1 314.6 on Tuesday and $1 281.0 per barrel on Friday, respectively. The contract dropped about 0.5% last week.

Silver for September closed the week 1.9% lower at $20.358 per troy ounce, while palladium was down 1.7% at $864.55. October platinum lost 0.9% to close at $1 465.75.

US economic reports

This week saw a plethora of economic reports from the worlds top economy. Foremost, the Fed held its two-day meeting, announcing a decision to cut monthly assets purchases by another $10 billion to $25 billion, backing on a solid recovery. The move was largely expected and extrapolates to a close of the stimulus program in late 2014. The program was introduced in late 2012 to pump fresh money into the then-slacking US economy.

Meanwhile, policymakers also kept the benchmark interest rate unchanged at 0.25%, adding that it still sees weakness in the labor market, and that a hike was not to happen for a “considerable time after the asset-purchasing program had concluded”, which was in line with market expectations.

Jobless claims and payrolls reports, which were released after the meeting, confirmed the Feds concern, as weekly jobless claims were significantly higher than expected, while payrolls thoroughly disappointed, adding just 209 000.

Meanwhile, consumer confidence grew, according to the Conference Board, reaching a seven-year peak, while the Bureau of Economic Analysis posted a 4.0% quarterly GDP growth, stoking further confidence for the US.

Dollar, stocks

The US Dollar Index, which measures the greenback’s performance against six other major currencies, closed some 0.3% higher this week at 81.39.

Meanwhile, US stocks saw significant losses this week. Dow 30 closed the week about 2.8% lower, Nasdaq 100 dropped 2.1% and S&P 500 was down 2.70%, as trading on Wall Street closed on Friday.

Elsewhere, assets at the SPDR Gold Trust were unchanged for a seventh session at 801.84 tons on Friday, after dropping some 6 tons last week.

Ukraine crisis

The West intensified actions against Moscow, in light of the Malaysian airliner being shot-down over rebel-held territory in Ukraine, killing all 298 people on board. The casualties were mostly Dutch and Australian.

The West claims rebels shot down the airliner, using a Russian-supplied Buk missile, and accuses Russia of aiding the separatists.

Moscow has denied any involvement with the conflict, and instead put the blame of the MH17 incident, and of the conflict in general, on the Western-backed Ukrainian authorities.

Gaza fighting

The 72-hour truce, which was declared by Israel on Friday and supported by Hamas, was shattered as Israeli shells killed more than 40 Palestinians, after a reported abduction of an Israeli soldier by the militants.

Delegations of both warring parties had arrived in Cairo, Egypt, to attend peace talks, but Egyptian authorities have said the talks were now postponed in light of the renewed violence.

Several hundred Palestinians were reported killed this week alone, and overall, more than 1 460 Palestinians, most of them civilians, are reported dead, according to the Palestinian Health Ministry. The Israeli military have lost 63 Israeli.

Next week

Next week well see ISMs US services PMI for July, along with a crucial ECB interest rate decision and retail sales in the Eurozone.