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Following a Sharp Decline, Gold Finds Support at The End of The Weekend
Following a Sharp Decline, Gold Finds Support at The End of The Weekend
Tuesday, 05 October 2021

Price Performance Indicator

Product

Previous Week

% Change

GOLDUD

$1,748.30

0.68%

GOLDID

Rp 24,924,000

1.14%

GOLDGR

Rp 809,000

1.76%

XAUUSD

$1,749.86

0.60%

COMEX

$1,751.70

0.38%

USD/IDR

Rp 14,250

0.46%

GOLDUD Focus:

  • (24/09 – 01/10) Gold closed the week with a slight gain of 0.68%
  • Key US Employment Data to look forward to

The gold contract GOLDUD closed last week's fluctuations with a slight gain of 0.68% to $1,760.20 per Troy Ounce. Gold previously started the week still under pressure after absorbing sentiment from the results of the Fed's meeting the previous week, but the losses were overcome – with the main focus still steering from the US.

For the record, at the previous Fed meeting, there was no change in interest rates, but based on a number of statements, there are indications that the current economic condition is in a fairly conducive condition even though the spread of COVID-19 in the US has slightly slowed economic recovery. However, in a number of subsequent statements, the market began to absorb that there was a plan by the Fed to begin policy normalization (tapering), especially on the quantity of asset purchases by the Fed. With this statement, USD fluctuations strengthened again and had put pressure on gold prices, as well as boosting market expectations that the Fed will start normalizing at the next November meeting which will be effective in December this year.

Then, suddenly rebounding, the price of gold responded to the correction in the USD amid the release of data on jobless claims which jumped compared to the previous week. Although the release of jobless claims data was pessimistic – in which the number of claimants was higher than in the previous weeks, market participants seemed to still anticipate that the Fed will take action to start tapering or at least reduce the amount of monthly stimulus starting in the month of March. Next November, with a decrease in stimulus levels and an increase in interest rates – and in the end still challenging the upside movement of gold prices.

Market View

US’ First Tier Data to Determined Policy

This week may become a busy week for USD and also for gold prices, as most of the first tier US economic data will be released plus the service sector PMI. Most of data were expected to show an optimist pace of economic recovery, these data may not be as important as it in an ordinary condition, but after the last Fed meeting that indicated how much the Fed paying attention on these data, the released of the tier one data may be considered as a policy moving data. Will the first tier causing a higher risk sentiment on both USD and the Gold as a safe-haven asset?

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Date

Data/Events

Actual

Expectation

Previous

5-Oct

US –  ISM Services PMI

-

59.9

61.7

6-Oct

US - ADP Non-Farm Employment Change

-

455K

374K

8-Oct

US - Average Hourly Earnings m/m

-

0.40%

0.60%

8-Oct

US - Non-Farm Employment Change

-

490K

235K

8-Oct

US - Unemployment Rate

-

5.1%

5.2%

Riset Indonesia Commodity and Derivative Exchange

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