Gold and silver prices are solidly lower in early U.S. trading Thursday. This follows the producer price index report that was down 0.2% month-on-month. Gold is trading at $2320.82, down $4.16. Silver is trading at $29.44, down 29 cents. Yesterday’s CPI numbers showed a 3.3% year-over-year increase for May, leading the Federal Reserve to hold interest rates steady. This economic backdrop provides context for Wells Fargo’s recent highlight of the strong performance of gold in 2024, with prices near record highs and a year-to-date gain in USD that outperforms the broader commodity market. Key drivers include strong global demand, central bank buying, and geopolitical tensions. The bank’s 2024 target range of $2,300 – $2,400 has been reached, and the 2025 target range of $2,400 – $2,500 is only 5% higher. However, Wells Fargo notes that gold may face a near-term pullback or stagnation due to currency exchange rates, as a stronger USD makes gold more expensive for buyers using weaker currencies. Despite this, the bank maintains a positive long-term outlook on gold.
