17/05/2024: This Week in Gold with Market Updates:
Price Action:
Gold Price:
Gold opened the week trading at $2,360 per ounce, after closing the previous week 2.55% higher. Gold broke its 2 week losing streak to close higher last week and it is on track to close higher again this week, with added momentum due to an economic data packed week.
On Monday, gold opened at $2,360 and began declining steadily throughout the day. This was in contrast to consolidation within Treasury Yields and the DXY. Gold experienced some consolidation to close the day out at $2,332, a 1.2% decline.
On Tuesday, price slowly began to climb and recover some of the losses that it had experienced on Monday. Gold was pushed higher on the back of a falling DXY and Treasury Yields. U.S. PPI came in hotter than expected, but Powell stated that this would not influence the FED’s monetary policy decisions as much as investors would expect, due to the previous month’s data being revised lower. Gold closed the day 1.1% higher at $2,358 per ounce.
On Wednesday, price moved further to the upside and followed a strong bullish trend higher for most of the day. Again, DXY and Treasury Yields declining further helped contribute to gold’s move higher. The biggest contributor to gold’s 1.2% daily incline was cooling CPI data from the U.S., with inflation being in line with analyst expectations. Gold closed the day at $2,386 per ounce.
On Thursday, price ended the 2 day winning streak that it was on. Price fell slightly during the early hours of trading and consolidated for the remainder of the day. Both the DXY and Treasury Yields recovered some of the losses that they experienced over the previous two trading sessions, which suppressed gold’s upside potential. Initial jobless claims came in higher than analysts expected at 222,000 signifying a resilient labour market. Gold closed the day 0.4% lower at $2,377 per ounce.
At the time of writing, gold is trading at $2,408 per ounce, a new all-time high. Gold is on track to close the week 2.03% higher.
Silver Price:
Silver opened the week trading at $28.18 per ounce, after closing the previous week 6.09% higher. Silver continued into the current week as it had ended the previous week, with strong momentum pushing price higher.
Silver is on track to close 4 out of 5 days higher for the trading week. Price experienced its largest push on Wednesday, with silver moving 3.7% higher. This was mainly in response to the U.S. CPI data cooling from the previous month’s figure.
At the time of writing, silver is climbing to new 10 year highs with the price currently trading at $30.63 per ounce. This puts silver’s weekly gain at 8.7%.
Market Updates:
14/05/2024: U.S. PPI & Powell Speaks:
U.S. PPI:
Purchasing Price Index data was released on Tuesday, which is used to measure the average change over time in the selling prices received by domestic producers for their output. It provides insights into price trends from the perspective of the producer, rather than the consumer.
U.S. PPI is used by the FED to determine whether inflation is cooling or heating up. For the month of April, PPI was seen to rise to 0.5%. This was higher than analyst expectations of 0.3% and the previous month’s figure of -0.1%. Generally, PPI can be used to determine how CPI will perform.
Powell Speaks:
FED Chair, Jerome Powell, spoke on Tuesday and provided investors with an insight into the FED’s current stance on monetary policy.
Powell reacted to the latest PPI figures and gave a bullish assessment on where he sees the U.S. economy.
Powell reinstated his confidence in the inflation rate falling, although expressed concerns on the hotter-than-expected PPI data that was seen earlier on in the day.
The FED’s Chair left investors’ expectations largely unchanged as he stated that more data will shed light on when the FED starts to cut rates.
15/05/2024: U.S. CPI & U.S. Retail Sales:
U.S. CPI:
The second inflation metric of the week came out on Wednesday and it brought good news for investors. CPI cooled to 0.3% in April, down from the previous month’s figure of 0.4%. This would add fuel to investor’s hopes for a rate cut from the FED sooner rather than later.
U.S. Retail Sales:
Retail sales came in lower than expected in April at 0%. This was much lower than the expected 0.4%, and the previous month’s figure of 0.6%.
This data may give an indication into consumer sentiment, and may have also contributed to the rise in gold.
16/05/2024: U.S. Initial Jobless Claims:
Jobless claims came in at 222,000 this week, higher than the expected 219,000. This was down from the previous month’s figure of 232,000.
17/05/2024: E.U. CPI:
Consumer Price Index came in line with analyst expectations for April, at 0.6%. This figure showed inflation to cool, when compared to the previous month’s figure of 0.8%.
