01/12/2023: This Week in Gold with Market Updates
Price Action:
Gold Price:
Gold price opened the week trading at $2,002 an ounce, after a solid performance during last
week’s trading. Price continued to follow the bullish trend that it embarked upon 2 weeks prior,
with gold edging higher throughout the trading week.
With an open above $2,000 an ounce on Monday, a key resistance level, it was widely expected
that gains may taper off and price may moderate. However, gold pushed past this key
psychological level during the early hours of trading to hit a new 6-month high of $2,018. Price
then moderated and traded within a narrow range for the remainder of the day.
On Tuesday, Gold moved further to the upside, hitting higher highs. A breakout occurred during
the afternoon, with price surging $29/oz within a 4-hour window. This breakout occurred as the
dollar hit a new 4-month low. Gold’s gains during the first 2 days of trading were enhanced by a
retreating dollar on FED rate-cutting expectations.
The early hours of Wednesday’s trading session saw gold briefly surpass $2,050 an ounce before
moderating and dipping slightly. Gold held steady for the remainder of the day, consolidating
within a 0.7% range and finishing the day 0.2% higher at $2,044 an ounce.
On Thursday, price retreated slightly, with a gradual decline experienced throughout the day.
This was to be expected after the strong run that gold was on over the last number of trading
days. A daily rise in the DXY contributed to gold’s fall for the day. Price fell 0.4% to close the
day at $2,036.
After a small gain in the early hours of Friday’s trading session, gold price moderated for the
remainder of the day. At the time of writing, gold is trading at $2,045.
Silver Price:
Silver followed gold’s trend throughout the week, reacting to the same news that pushed the
yellow metal to the upside.
Silver opened the week at $24.33 an ounce, and experienced an early surge on Monday morning.
Price broke through the $24 level, a recent resistance level for the metal, jumping $0.31/oz to
close the day at $24.64. On Tuesday, price continued to follow the uptrend that it was on, making higher highs and
higher lows throughout the day. Silver surpassed $25 on Tuesday afternoon, closing the day at
$25.02.
Price moderated during Wednesday’s trading session, a slight divergence from the metal’s
identical trend with gold for the week up to that point. After little fluctuation throughout the day,
price finished even, at $25.02 an ounce.
Price continued to consolidate for much of the day on Thursday, before a move to the upside
during the later hours of trading. Price rose 1% to close the day at $25.27, well above the $25
level and a second straight monthly gain for the metal.
On Friday, the positive price momentum continued and the price of the metal is looking to finish the week strong at over $25.20 per ounce, at the time of writing.
Market Updates:
Consumer Confidence:
On Tuesday, the latest consumer confidence report for the U.S. was released.
Consumer confidence, after a number of declines, was seen to rise for the month of November.
The rise is expectedly due to a shift in expectations from U.S. consumers, who noticed
moderating inflation levels. However, 2/3rds of Americans’ believe a recession is likely over the
next year.
Consumer confidence came in at 102, beating expectation of 101 and the previous month’s 99.1,
respectively.
FED Waller Talk:
Also on Tuesday was a talk from FED governor, Christopher Waller. Waller took a dovish turn
from his previously hawkish stance. The FED governor stated that he was ‘increasingly
confident’ that the FED was on track to cool inflation to the Central Bank’s target rate of 2%.
Waller also indicated that, if inflation falls further, rate cuts could be expected.
This incidentally moved markets higher, as investor expectations on the future of rates have been
instrumental in the recent run up in gold price.
U.S. PCE:
The FED’s preferred measure of inflation, personal consumption expenditure (PCE), was
released on Thursday.
The report showed inflation rising 0.2% in October, and 3.5% Y-o-Y, excluding volatile food
and energy prices. This moved in line with expectations and could potentially give the FED a
reason to hold rates steady as opposed to embarking on a cutting cycle.
The latest PCE data caused gold price to moderate after the latest surge in price.
