Metals Stocks: Gold ends higher as key inflation gauge shows signs of cooling

Gains for gold echoed similarly tepid advances for U.S. stock index futures
ES00,
+1.68%,
ahead of a large batch of economic data, including the Federal Reserve’s preferred inflation indicator, the core personal consumption expenditure index deflator.

The U.S. core PCE is expected to have gained 4.9% in April annually, a drop from 5.2% in March, according to economists polled by Dow Jones Newswires and The Wall Street Journal.

That data will come at 8:30 a.m. Eastern, along with disposable income and consumer spending for the same month, and advance international trade in goods.

U.S. stocks are headed for weekly gains of between 3% and 4%, amid some relief from the release of minutes from the Federal Reserve’s early May meeting. The Fed reinforced expectations of summertime half-point interest rate increases to battle inflation, but also indicated it will remain flexible after that to reassess the economy.

The minutes didn’t really reveal much new and gold’s sideways action this week, against more solid gains for other assets, shows demand for it lacking right now, Daniel Briesemann, research analyst at Commerzbank, told clients in a note.

“The past two days saw outflows from the gold ETFs again, meaning that gold is lacking any impetus from financial investors,” he said.

Gold’s gain Friday came amid a slightly softer tone to the dollar
DXY,
-0.07%.

“Gold remains bid above the 200-dma [daily moving average] ($1842 per ounce), but the upside momentum is fading as the improving risk appetite moves capital toward riskier, and better yielding assets,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a note to clients.

Among other metals, platinum 
PLN22,
+0.51%
rose 0.6% to $943.40 an ounce, while palladium 
PAM22,
+2.63%
gained 0.9% to $2,012.50 an ounce.

Copper 
HG00,
+1.23%
 prices rose 0.5% to $4.28 per pound.