Gold prices declined in European trade as dollar rebounded from one-week lows against a basket of major rivals, ahead of US consumer spending data, important for gauging inflationary pressures. 

The precious metal is on track for another quarterly profit on strong haven demand amid mounting concerns about the banking sector in the US and Switzerland, and on speculation that global central banks will wrap up the current cycle of policy tightening soon.

Gold Prices Today

Gold prices fell 0.4% to $1,973 an ounce, after rising 0.8% yesterday, the second profit in three days as the dollar dipped. 

The Greenback

The dollar index rose 0.3% on Friday off one-week lows at 102.05, against a basket of major rivals.

The gains came as investors focus once more on data with banking concerns subsiding as US authorities intervene to contain the fallout of the collapse of several banks. 

Additionally, three Fed members opened the door for more rate hikes in the future to contain inflation.

Fed Rates

Following such remarks, pricing for no change in interest  rates at the Fed's May meeting fell from 57% to 45%, while pricing for a 0.25% rate hike rose to 55%.

Consumer Spending Data

Investors await important US consumer spending data later today, crucial for gauging inflationary pressures and the path forward for monetary policies. 

Quarterly Profits

Gold prices are up a strong 8.5% so far in the first quarter of the year, the second such profit in a row. 

Gold prices hit one-year highs at $2,009 an ounce on March 20 on haven demand amid concerns about the banking sectors. 

Such concerns exploded after the Silicon Valley Bank's collapse alongside two other smaller banks in the US, followed by credit troubles for the Swiss Credit Suisse Bank.

The SPDR

Gold holdings at the SPDR Gold Trust remained flat yesterday at 929.47 tones, the highest since October 2022.

Agricultural commodities fell at the Chicago Exchange for the first time in five sessions but losses were contained due to concerns about Russian supplies, with the the global grains trading company Cargill saying it won't deal with Russian grains at its own export station. 

Cargill said on Wednesday it'll take another step to back off the Russian market by quitting operations with the largest wheat supplier at its own export station starting July. 

Russian exports could be hampered as well if Moscow recommended a temporary cut in grain exports as some Russian media alluded. 

However, Reuters sources said Russia doesn't plan to stop wheat exports but will ask exporters to raise prices for the farmers to cover production costs. 

Conversely, Ukrainian official data showed Ukrainian grain exports rose to 5.1 million tones in March compared to 1.4 million tones in March 2022. 

And some analysts said Brazil is ready to supply nearly half the soybeans that Argentina will import after undergoing the worst drought in 100 years, which destroyed its fields and cut 2023 output by half. 

Corn

Corn futures due in May fell 0.1% to $6.49 a bushel. 

Soybeans 

Soybean futures due in May fell 0.2% to $14.74 a bushel. 

Wheat

Wheat futures due in May fell 1.9% to $6.92 a bushel. 

US stock indices rose on Thursday following earlier data while concerns about the banking sector fade away as authorities intervene. 

Banking Troubles

Banking shares rebounded today, with the SPDR-S&P regional bank index rising 1%, accumulating 7% of gains since March 23. 

Investors continue to show optimism that the banking crisis is tapering off with the volatility index VIX hitting 19 after scaling 30 earlier this month.

Data

Earlier US data showed the GDP grew 2.6% y/y in the fourth quarter of 2022, down from 3.2% in the third quarter, and missing estimates of 2.7%. 

US unemployment claims rose to 198 thousand in the week ending March 25, above estimates of 196 thousand, and above the previous reading's 191 thousand.

Dow Jones rose 0.3%, or 85 points as of 15:07 GMT to 32,803,while S&P 500 climbed 0.6%, or 23 points to 4,050, as NASDAQ added 0.8%, or 102 points to 12,028.

Oil prices rose in European trade on Thursday after a short hiatus from gains, almost hitting two-week highs as concerns about US oversupplies fade. 

Recent data showed a spike in US crude stocks last week, while US output slowed down as well.

Prices are also boosted by a tumble in dollar's standing against major rivals after weak US data.

Global Prices

US crude rose 1.25% to $73.82 a barrel, while Brent added 1.2% to $78.34 a barrel. 

US crude lost 1.05% on Wednesday on active profit-taking away from two-week highs at $74.32. 

Brent fell 1.1% after a two-day wave of gains that sent prices to March 14 highs at $78.96. 

US Stocks

The Energy Information Administration announced a drawdown of 7.5 million barrels in the week ending March 24, while analysts expected a buildup of 1.8 million barrels. 

It's the largest inventory drawdown in 2023 in a sign of improving US demand on fuel. 

US Output

The EIA also announced a drop in US crude production by 100 thousand bpd last week to a total of 12.2 million barrels. 

The Dollar

The dollar index fell 0.5% on Thursday to one-week lows at 102.12, against a basket of major rivals, underpinning dollar-denominated commodities. 

The decline came after weak US data showed weak US growth while unemployment claims rose estimates. 

Such data hurt pricing for a 0.25% rate hike by the Federal Reserve in May. 

Kurdish Supplies

Turkey stopped the Kurdistan Region from pumping crude through its oil pipeline after a court order than required the approval of the Iraqi government to ship the oil.

Such legal conflicts in Iraq between the federal government and Kurdistan led to a cut of 450 thousand bpd in crude exports.

Barkley's expects an increase of $3 a barrel in crude stocks from its $92 projections for Brent in 2023 with a long-term disruption in Kurdish exports.