Gold racks up sixth straight weekly gain; silver surges to cap strongest week in 14 years

[stack of shiny gold bars 3d illustration]
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Gold futures rose Friday after a key U.S. inflation data point met market expectations, reinforcing expectations that the Federal Reserve will roll out further interest rate cuts this year, while silver continued a rally that resulted in its strongest week since October 2011.

The U.S. personal consumption expenditures price index rose 0.3% in August, in line with estimates and following a 0.2% gain in July, and annual headline PCE inflation rose to 2.7%, also in line but the highest in six months, from 2.6% in the July report.

The University of Michigan's final reading of its consumer sentiment survey for September came in at 55.1, lower than the preliminary reading of 55.4 and well below August’s final reading of 58.2.

Investors now see an 88% probability of a rate cut in October and a 65% chance of another cut in December, according to the CME FedWatch Tool.

Meanwhile, silver and platinum are gaining momentum, with investors turning to more affordable alternatives as gold breaks records on a regular basis.

"The price of gold may have recently reached a new record high, but the price of silver has actually performed even more impressively," Commerzbank head of commodity strategy Thu Lan Nguyen said in a note, as silver has surged 59% so far this year, outperforming gold, which has gained 43%. "The record high price of gold is now deterring many and... alternatives are therefore being sought."

Industrial demand also has been a factor underpinning strength in silver, with an extra boost this week from China President Xi's pledge to cut his country's net carbon emissions 7%-10% by 2035; silver is a key component in solar cells.

Platinum jumped 2.5% on Friday to $1,568.21, and has surged 71% YTD to its highest level since 2013, partly on expectations of another annual supply deficit.

Comex gold and silver both scored their sixth consecutive weekly gain, with the front-month September gold contract (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) closing +2.8% to $3,775.30/oz, its second-highest settlement in history, and front-month September silver (XAGUSD:CUR [https://seekingalpha.com/symbol/XAGUSD:CUR]) ending +8.6% to $46.221/oz, its best settlement value since April 29, 2011 and not far off its all-time high of $48.70/oz set in January 1980.

On Friday, the gold and silver front-month gained 1% and 3.4%, respectively.

ETFs: (NYSEARCA:GLD [https://seekingalpha.com/symbol/GLD]), (NYSEARCA:GDX [https://seekingalpha.com/symbol/GDX]), (IAU [https://seekingalpha.com/symbol/IAU]), (NUGT [https://seekingalpha.com/symbol/NUGT]), (PHYS [https://seekingalpha.com/symbol/PHYS]), (GLDM [https://seekingalpha.com/symbol/GLDM]), (AAAU [https://seekingalpha.com/symbol/AAAU]), (SGOL [https://seekingalpha.com/symbol/SGOL]), (RING [https://seekingalpha.com/symbol/RING]), (BAR [https://seekingalpha.com/symbol/BAR]), (OUNZ [https://seekingalpha.com/symbol/OUNZ]), (NYSEARCA:SLV [https://seekingalpha.com/symbol/SLV]), (PSLV [https://seekingalpha.com/symbol/PSLV]), (SIVR [https://seekingalpha.com/symbol/SIVR]), (NYSEARCA:SIL [https://seekingalpha.com/symbol/SIL]), (SILJ [https://seekingalpha.com/symbol/SILJ])

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