Gold heads for first weekly loss in 3 months as platinum hits 11-year high

Gold prices inched up Friday morning, but it wasn’t enough to change the bigger picture. For the first time in three months, the metal is headed straight for a weekly loss, dragged down by strong U.S. economic data and eased panic about the Federal Reserve’s independence.

As of press time, spot gold rose 0.3% to $3,349.49 per ounce, clawing back some of Thursday’s 1.1% drop. Still, over the week, it’s down 0.2%. Meanwhile, U.S. gold futures fell 0.3% to $3,354.70.

This stumble comes at the same time platinum is on a heater. The white metal jumped 1% to $1,472.20 per ounce, hitting its highest price since August 2014, an almost 11-year high. Palladium didn’t sit out either, climbing 1.4% to $1,297.78, its highest since August last year. Silver stayed flat at $38.12.

Trump sparks Fed drama, investors react to solid U.S. numbers

There’s been a lot of noise this week. Early on, a Reuters source claimed Donald Trump was open to firing Fed Chair Jerome Powell, setting off alarms about the Fed’s independence. But by midweek, Trump said he wasn’t planning to sack Powell—though he didn’t miss a chance to rip into the Fed’s rate policies again.

That back-and-forth shook markets at first, but fears faded quickly. Still, as UBS commodity analyst Giovanni Staunovo said, “Market participants remain concerned about the independence of the Fed. For now, those risks have declined, and U.S. economic data has remained solid, capping the upside for gold.”

And there’s the other big factor: the U.S. economy doesn’t look like it’s slowing down. Retail sales for June beat expectations. Initial jobless claims for the week ending July 12 dropped, showing fewer layoffs. That kind of data dims hopes for rate cuts anytime soon, which puts pressure on gold.

But Staunovo noted that Trump still wants the Fed to cut rates aggressively, which “is putting a floor under the market.” So while the price is softening, it’s not collapsing. The uncertainty is what’s keeping gold from free-falling.

Bond yields dip while sentiment data looms

U.S. Treasury yields dropped Friday as investors braced for more economic signals. At 5:33 a.m. ET, the 10-year yield slipped just over 1 basis point to 4.45%, while the 2-year yield dropped 2 basis points to 3.89%. The 30-year yield also eased by more than a point to settle at 5%. (For anyone new: 1 basis point equals 0.01% and yields move opposite to bond prices.)

Investors are eyeing two things on Friday. First, the Michigan Consumer Sentiment Index. The preliminary July reading, expected at 10 a.m. ET, is forecast to rise to 61.8 from 60.7. That’s a subtle move, but enough to show people are still confident in the economy.

Second, the market’s waiting for data on building permits and housing starts, due at 8:30 a.m. ET. These numbers will help shape the outlook on the housing market, which has been taking punches from high mortgage rates.

All of this matters because it feeds directly into how people view future Fed moves. Stronger data means the Fed has more room to hold rates steady, which hurts gold. The yellow metal doesn’t earn interest, so when bond yields look attractive, gold starts losing its shine.

Still, there’s a base of long-term support. Adrian Ash, head of research at BullionVault, said, “While gold might struggle near-term without a new, specific policy shock, its underlying uptrend remains firmly in place, supported by central bank buying and, increasingly, real money demand for allocated bullion.”

That said, Ash added that investors have already moved on. “In precious metals, the carnival has moved on from safe-haven gold to silver, platinum and palladium as pro-growth, industrial alternatives.”

And the numbers back that up. While gold was grinding through a 0.2% weekly decline, platinum was making headlines with a nearly 11-year high, palladium hit its best level since last August, and silver held steady near multi-year highs.

The U.S. dollar also played its part. While it was down 0.4% on Friday, it’s still on pace for its second weekly rise in a row. A stronger dollar makes gold more expensive for foreign buyers, cutting into demand.