Palladium prices fell on Friday as the dollar gained ground against most major rivals as investors assess latest data.

US economy grew 2.9% in the fourth quarter of 2022, beating estimates of 2.6%, while up from 3.2% in the third quarter.

US durable goods orders rose 5.6% in November, beating estimates of 2.4%, and improving from October's 2.1% decline.

US unemployment claims tumbled to 181 thousand in the week ending January 21, the slowest since last April, and below estimates of 203 thousand, while also down from 192 thousand in the previous reading.

US consumer spending, an important index for inflation, rose 0.3% last month. 

Such data indicate the strength and vitality of the economy, which is reflected in recent statements by the IMF expecting the US recession to avoid recession this year.

The dollar index rose 0.1% to 101.8, with a session-high at 102.1, and a low at  101.6. 

Palladium futures due in March as of 15:11 GMT fell 2.7% to $1,620 an ounce. 

Will Palladium Extend Losses?

Despite giving up both the $3000 and $2000 thereafter after the Russian-Ukrainian war, now analysts expect palladium to regain some ground as demand improves on industrial metals while China eases Covid restrictions. 

Oil prices rose in  European trade for the second session, almost hitting multi-week highs and on track  for the third weekly profit in a row on hopes for improving Chinese demand.

In addition, major producers are considering another output cut ahead of the OPEC + meeting next week.

Global Prices

US crude rose 1.5% to $82.40 a barrel, while Brent added 1.4% to $88.58 a barrel, with a session-low at $87.32. 

US crude rose 0.8% on Thursday while Brent added 1.25%, resuming gains after a two-day hiatus off multi-week highs. 

Global oil prices are up 1% so far this week on track for the third  weekly profit in a row. 

Chinese Demand

The International Energy Agency said that lifting Covid 19 restrictions in China is expected to increase global demand to record highs this year.

Analysts already pointed to a 22% jump in road traffic in China so far this month compared to last year.

OPEC +

Reuters reported that countries in OPEC + are discussing another supplies cut a week before their meeting in Vienna.

Will Oil Prices return above $90 once again?

Energy experts expect global oil prices to continue improving and reaching above $90- a barrel as demand in China in particular rebounds in the first quarter of the year. 

Dollar rose in European trade against a basket of major rivals off eight-month lows for  the second session, after strong US growth and unemployment data.

The gains come ahead of US consumer spending data for December, important for gauging inflation in the country. 

The Dollar Index

The index rose 0.3% to 102.03, with a session-low at 101.68, after rising 0.2% yesterday, the first profit in three days off eight-month lows at 101.50. 

The dollar rose as well after data showed US economy grew in the fourth quarter more than expected, while unemployment claims hit nine-month lows.

Spending Data

Investors await important US consumer spending data for December, important for gauging inflation and the pace of policy tightening this year by the Fed.

US consumer spending is expecting up 5.1% in December, slowing down from 5.5%, while expected up 0.2% on a monthly basis compared to a 0.1% rise in November. 

Strong data will bolster the case for an extended policy tightening and multiple more rates hikes this year, in turn pressuring gold prices.

Will The Dollar Sustain More Losses in 2023? 

If the stream of data continued to show slower inflation and weaker prices in the US, it's expected the Fed will end its cycle of rate hikes, in turn hurting the greenback. 

Gold prices fell in European trade for a second session off nine-month highs on profit-taking while dollar regained ground. 

Dollar rebounded from recent lows after strong US data that bolstered the case for multiple Fed rate hikes this year. 

Now investors await important US data on consumer spending later today to gauge the pace of policy tightening this year.

Gold Prices Today

Gold prices fell 0.45% to $1,919 an ounce, after losing 0.9% yesterday on profit-taking away from nine-month highs at $1,949. 

The Dollar

The dollar index rose 0.2% on Friday for the second session off eight-month lows at 101.50 against a basket of major rivals.

Recent data showed US economy grew in the fourth quarter more than expected, while unemployment claims hit nine-month lows.

Spending Data

Investors await important US consumer spending data for December, important for gauging inflation and the pace of policy tightening this year by the Fed.

Strong data will bolster the case for an extended policy tightening and multiple more rates hikes this year, in turn pressuring gold prices. 

The SPDR

Gold holdings at the SPDR Gold Trust remained flat yesterday at 919.37 tones, the highest since October 31. 

Would Gold Prices Pierce $2,000 in 2023?

Many analysts expect gold prices to extend gains beyond $2,000 for the first time since March 2022 amid active expectations the Fed will end the cycle of rate hikes in the first half of the year.