Phil Carr
The Gold & Silver Club
Gold prices pulled back on Wednesday as trader’s book profits ahead of Friday’s key U.S jobs data.
Gold has been on an incredible bull-run throughout the past month, with the precious metal notching up a fourth consecutive week of gains. Gold crossed the finishing line for May – up over 8% to score its biggest monthly gain since July 2020.
Since March, Gold prices have rallied over $230 from their recent lows of $1674 an ounce. That’s an outstanding gain of 13.7% in the space of two-months.
Looking ahead to this week, the biggest market-moving events that traders will be closely monitoring is Friday’s U.S Employment Report, which is the most highly anticipated economic report of every month. It’s also a key measure of economic performance and inflation tracked by the Fed.
There will be a huge focus on Friday’s data, especially as recent inflation readings have come in much hotter than expected. The latest was the PCE Price Index, which showed core inflation running at 3.6% from a year earlier. That’s its biggest annual rise since 1992 – raising fears that the cost of living is continuing to surge at an alarming pace, whilst the labour market remains unexpectedly sluggish.
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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