Last Week’s Market Recap & The Week Ahead in Global Markets:
Gold Price Recap – 04/03/24 – 08/03/24:
Gold exhibited remarkable strength throughout the past week, with bullish momentum driving prices to new heights. Opening the week at $2,083 per ounce, gold showcased resilience as it closed higher for the third consecutive week. The week commenced with a surge on Monday, with prices climbing 1.7% to reach $2,114, fueled by anticipations of dovish remarks from Federal Reserve Chair Powell.
Tuesday saw a more gradual ascent, with gold closing at $2,128 despite robust economic data from major economies, typically seen as bearish for gold. However, positive sentiments persisted as Powell hinted at potential future rate reductions, propelling prices to $2,148 by Wednesday.
The bullish trend continued on Thursday as investors anticipated imminent rate cuts, driving prices to $2,160. Friday brought further gains, with gold hitting $2,195 post-U.S. Non-Farm Payroll data, ultimately closing the week at $2,177—an impressive 4.3% weekly gain.
Silver Price Recap – 04/03/24 – 08/03/24:
Silver mirrored gold’s upward trajectory, albeit with slight fluctuations. Beginning the week at $23.13, silver surged 3.2% on Monday to close at $23.89. Tuesday saw a minor dip to $23.67, attributed to strong economic data, but prices swiftly recovered, reaching $24.17 by Wednesday, a 2.1% increase.
Thursday witnessed another uptick, with silver closing at $24.33, influenced by similar factors as gold. On Friday, after an initial climb to $24.64 following U.S. jobs data, silver settled at $24.32, securing a weekly gain of 4.89%.
Economic Data and Central Bank Decisions Recap – 04/03/24 – 08/03/24:
Tuesday, 5th of March: Composite/Services PMI and EU PPI:
In the U.S., Composite and Services PMI data surpassed expectations, indicating robust expansion in both private sector and service sector activities, with figures standing at 52.5 and 52.3, respectively. Despite this strong performance, gold and silver prices remained resilient, defying typical trends where strong economic data might dampen demand for safe-haven assets.
Meanwhile, in the Eurozone, the Producer Price Index (PPI) exhibited a steeper decline than anticipated at -8.6%, reflecting deeper deflationary pressures within the region. This downturn, influenced by factors such as subdued demand and global economic challenges, raises concerns for policymakers at the European Central Bank (ECB) regarding appropriate monetary responses.
Wednesday, 6th of March: FED Chair Powell Testimony & ADP Non-Farm Payrolls:
Federal Reserve Chair Jerome Powell’s testimony hinted at potential future rate cuts, spurring demand for gold as investors speculated on reduced opportunity costs associated with holding the precious metal. Additionally, the slightly lower-than-expected ADP Non-Farm Payrolls figure of 140,000 underscored cautious economic sentiments, reinforcing the case for prudent policy measures by the Fed.
Wednesday & Thursday, 6-7th of March: BOC & ECB Interest Rate Decisions:
The Bank of Canada and ECB opted to maintain their current interest rates, reflecting their assessments of prevailing economic conditions and the necessity for ongoing policy support amidst global uncertainties. This decision underscores the importance of flexible and vigilant monetary policies in navigating uncertain economic landscapes.
Friday, 8th March: Non-Farm Payrolls & Unemployment Data:
Private Non-Farm Payrolls data in the U.S. exceeded expectations with 223,000 new jobs added in February, typically a bullish indicator for the U.S. Dollar. However, the simultaneous rise in the unemployment rate to 3.9%, surpassing forecasts of 3.7%, fueled speculation of potential rate cuts by the Fed in the near future. This anticipation of looser monetary policy propelled gold prices higher despite the strong job growth data
Navigating Global Markets This Week: 11/03/24 – 15/03/2024:
Wednesday, 13th of March: U.S. Consumer Price Index:
Investors keenly await the Consumer Price Index (CPI) figures on Wednesday, with forecasts suggesting stability at 3.1% for headline inflation and a slight dip to 3.7% for core inflation. This data carries significant weight as it shapes the FED’s guidance, potentially influencing market sentiment towards precious metals.
Thursday, 14th of March: U.K. Gross Domestic Product:
Attention then turns to the United Kingdom as GDP is expected to rebound to 0.2% month-on-month following a previous contraction. If analyst forecasts are accurate, this would be a good sign for the U.K. economy. An expanding economy would generally limit the upside potential of gold and silver.
Thursday, 14th of March: U.S. PPI, Retail Sales, and Jobless Claims:
In the U.S., Producer Price Index (PPI) data will offer indications of price pressures for producers. Headline PPI is expected to come in at 0.3%, in line with the previous month’s figure, while core PPI is expected to come in at 0.2%, down from the previous month’s figure of 0.5%.
Retail Sales are expected to come in at 0.5% after a previous contraction. Any deviations from expectations could shape perceptions of the Federal Reserve’s monetary policy stance, impacting demand for gold and silver as inflation hedges.
Following last week’s Non-Farm Payrolls data, Jobless Claims figures will be closely monitored for insights into labour market dynamics. Any unexpected trends could influence investor sentiment and perceptions of economic stability, potentially affecting precious metal prices.
Friday, 15th of March: U.S. Consumer Sentiment:
The Michigan Consumer Sentiment index, expected to remain unchanged at 79.6, could have a notable impact on equity markets, indirectly influencing demand for safe-haven assets like gold and silver.
Notes:
Multiple data releases throughout the week will further influence gold and silver markets. With the recent run-up in price, gold can continue to post all-time highs with favourable economic data.
