Gold Futures Settle Modestly Higher

Gold prices moved higher on Friday, after data showed the increase in consumer prices in the month of April was not as severe as to raise concerns about any policy tightening by the central bank.

The dollar pared its gains but still held on in positive territory, thus limiting gold's upside.

The dollar index, which rose to 90.44 by mid morning, dropped to 89.98. It was last seen at 90.03, up 0.06% from the previous close.

Gold futures for August ended up by $6.80 or about 0.4% at $1,905.30 an ounce, the highest close since January 7. On Thursday, the contract shed 0.3%, after scoring gains in the previous three sessions.

Gold futures gained about 1.5% in the week, and climbed 7.8% in the month.

Silver futures for July gained $0.074 or 0.3%, settling at $28.014 an ounce today. Silver futures gained nearly 2% this week, and added 8.3% in the month.

Copper futures for July settled at $4.6775 per pound, gaining $0.0145 or 0.3%. Copper futures gained about 4.4% in the week and 4.7% in the month.

An inflation reading preferred by the Federal Reserve showed an acceleration in the pace of price growth but not as much as traders had feared.

The reading on core consumer prices showed the pace of price growth accelerated to 3.1% in April from 1.9% in March.

While the increase in prices exceeded economist estimates, the jump was apparently not as severe as to raised concerns about the Federal Reserve tightening monetary policy.

The Fed has attributed the recent increase in prices to "transitory factors" and has repeatedly hinted that it will not consider tightening until prices exceed 2% for "some time."

The University of Michigan's consumer sentiment for the US was revised slightly higher to 82.9 in May of 2021 from a preliminary 82.8, matching market forecasts. The reading still pointed to the lowest consumer confidence level in 3 months.

Personal income in the US decreased 13.1% month-over-month in April of 2021, compared to market expectations of a 14.1% drop and after jumping by a revised 20.9% in March. Personal spending in the United States rose 0.5% from a month earlier in April 2021, following an upwardly revised 4.7% rise in March.

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