Gold prices are solidly lower and hit a two-week low in midday U.S. trading Thursday. Silver is down sharply, too. Modest overnight gains in both metals were erased after the release of upbeat U.S. economic data this morning that beat market expectations. August gold was last down $27.10 at $1,943.00 and September silver was down $0.645 at $24.325.
U.S. economic data Thursday morning fell squarely into the camp of the monetary policy hawks, suggesting at least one more interest rate hike may be necessary to further cool the U.S. economy and choke off problematic price inflation. The first estimate of second-quarter U.S. gross domestic product came in at up 2.4%, year-on-year, which beat market expectations for a rise of 2.0%. The internals of the GDP report were also solid. Meantime, U.S. durable goods order were reported up 4.7% in June versus expectations for a 1.5% gain. Also, weekly U.S. jobless claims came in lower than expected. The data sharply boosted the U.S. dollar index and pushed U.S. Treasury yields up—both of which are daily bearish elements for the precious metals markets.
The marketplace Thursday pretty much digested Wednesday afternoon’s 25 basis-point interest rate increase from the Federal Reserve. Fed Chair Powell’s remarks at his press conference were deemed not too hawkish and not too dovish and the markets showed no big reactions. Some Fed watchers are thinking the central bank is now done with its rate-hike cycle, while others think the Fed will do one more rate increase in November.
Asian and European stock markets were mostly higher in overnight trading. U.S. stock indexes are higher at midday. The indexes are at or near their highs for the year amid a summertime rally.
In other news, the European Central Bank slightly raised its main interest rate at today’s monetary policy meeting, as expected.