Gold: Next week's key macroeconomic events to keep an eye on

Eren Sengezer FXStreet

After starting the week above $1,900, gold lost its traction and dropped to a fresh monthly low of $1,860 on Thursday as the European Central Bank's dovish tone and the risk-off environment boosted the demand for the USD. Although XAU/USD was able to stage a technical correction on Friday, it lost more than 1% on a weekly basis and closed at $1,879.

Coming up next week

All eyes next week will be on the United States presidential election on November 3rd and the market volatility is expected to heighten with the outcome having a significant impact on market sentiment.

Previewing the potential impact of the election outcome on gold, "gold heavily depends on stimulus, and the more, the merrier," said FXStreet analyst Yohay Elam. "The optimal scenario is a clean Democratic sweep, followed by a Trump victory. A split between President Trump and the Senate is the worst outcome."

The IHS Markit and the ISM both will be releasing the October Manufacturing and Services PMI reports for the US but the market reaction is likely to remain muted. Later in the week, the Bank of England (BoE) will publish its Monetary Policy Report. If the BoE signals a dovish shift in its policy outlook in the wake of the second national lockdown in the UK, we could see gold gather strength against major currencies as a safer alternative.

Additionally, the US Federal Reserve will announce its Interest Rate on Thursday but investors don't expect to see a surprising change in the policy outlook.

On Friday, Nonfarm Payrolls (NFP) from the US will be watched closely by the market participants. Markets expect the NFP to increase by 700K in October.

Gold Price Analysis: XAU/USD has three ways go in response to the 2020 Presidential Elections.

Gold Price Weekly Forecast: XAU/USD needs a blue wave for a golden era, all eyes on the elections.

2020 Elections: Trump is showing signs of a comeback, will the dollar follow?

2020 Elections: Seven reasons why this is not 2016, time to focus on the Senate.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD hovers around 1.1850 ahead of FOMC Minutes

EUR/USD stays on the back foot around 1.1850 in the European session on Wednesday, pressured by renewed US Dollar demand. Traders now look forward to the Minutes of the Fed's January monetary policy meeting for fresh signals on future rate cuts.

GBP/USD defends 1.3550 after UK inflation data

GBP/USD is holding above 1.3550 in Wednesday's European morning, little changed following the UK Consumer Price Index (CPI) data release. The UK inflation eased as expected in January, reaffirming bets for a March BoE interest rate cut, especially after Tuesday's weak employment report.

Gold retains bullish bias amid Fed rate cut bets, ahead of Fed Minutes

Gold sticks to modest intraday gains through the early European session, reversing a major part of the previous day's heavy losses of more than 2%, to the $4,843-4,842 region or a nearly two-week low. That said, the fundamental backdrop warrants caution for bulls ahead of the FOMC Minutes, which will look for more cues about the US Federal Reserve's rate-cut path.

Pi Network rally defies market pressure ahead of its first anniversary

Pi Network is trading above $0.1900 at press time on Wednesday, extending the weekly gains by nearly 8% so far. The steady recovery is supported by a short-term pause in mainnet migration, which reduces pressure on the PI token supply for Centralized Exchanges. The technical outlook focuses on the $0.1919 resistance as bullish momentum increases.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Top 3 Price Prediction: Bitcoin, Ethereum, and Ripple face downside risk as bears regain control

Bitcoin, Ethereum, and Ripple remain under pressure on Wednesday, with the broader trend still sideways. BTC is edging below $68,000, nearing the lower consolidating boundary, while ETH and XRP also declined slightly, approaching their key supports.