Price Performance Indicators

Gold focus :

1.    ICDX gold price rose 1.26% in a week (20/10 - 24/10).

2.    The Fed meeting leaflet and the US PMI data.

Market Review

ICDX gold prices rose 1.26% compared to the previous week with market focus on Federal Open Market Committee Minutes Meeting and US Purchasing Managers' Index (PMI) data. Stemming from the geopolitical turmoil of the Middle East, the first Israeli-Hamas ceasefire deal since seven weeks of fighting allowed for the exchange of hostages and prisoners.

All participants agreed that policymakers are in a position to proceed monetary policy carefully and decisions in each meeting are made based on the totality of incoming information, FOMC meeting minutes released Wednesday (22/11) mentioned. Participants said economic activity had expanded at a strong pace in the third quarter, job gains remained strong with unemployment remaining low and inflation still far short of the Fed's target despite showing signs of slowing. S&P Global released its Purchasing Managers' Index (PMI) survey with the U.S. PMI composite index unchanged at 50.7 this month while a slight rise in service sector activity offset a contraction in the manufacturing industry. The US Manufacturing PMI reading fell to 49.4 this month from the previous month's 50.0 reading after two consecutive months of gains earlier, while the PMI for the services sector was 50.8 from the previous month's reading of 50.6.

Chinese government advisers plan to propose an economic growth target in the range of 4.5 percent to 5.5 percent at the annual Central Economic Work Conference that discusses policy plans and prospects for the world's second-largest economy. The advisers added authorities need to step up fiscal stimulus and adopt expansionary monetary policy to stimulate aggregate demand. China's economic growth is also a concern for market players considering that the country is one of the main consumers of gold.

On the geopolitical side of the Middle East, Israel – Hamas agreed to a four-day ceasefire deal that began on Friday (24/11) at 7 am local time (0500 GMT) by allowing the release of 50 hostages held by Hamas and 150 Palestinian prisoners from Israeli jails. Meanwhile, international concern has focused on the condition of hospitals in the northern part of Gaza where all medical facilities have stopped functioning. Israel said it was detaining the head of Al-Shifa hospital for questioning, Hamas condemned the arrest.

Market View

Geopolitical Development of the Middle East

Qatar together with Egypt which facilitated negotiations between the two sides said there was an agreement to extend the two-day Israeli-Hamas ceasefire from the one that was supposed to expire on Monday (27/11). The head of Egypt's Information Service, Diaa Rashwan, said the deal being negotiated included the release of 20 Israeli hostages and 60 Palestinian prisoners in an extended ceasefire. Israeli Prime Minister Benjamin Netanyahu met security forces inside the Gaza Strip at the weekend and spoke with US President Joe Biden about welcoming an extension of a temporary ceasefire if it meant that an additional 10 prisoners were released every day. However, Netanyahu also reiterated that at the end of the ceasefire it returned with full force to achieve the goal of eliminating Hamas. Gold as a safe-haven  asset is in demand amid geopolitical uncertainties.

US Central Bank Monetary Policy

Market participants are further looking forward to important upcoming U.S. data such as preliminary readings of gross domestic product (GDP) and personal consumption price index (PCE) to look for further clues on the Fed's monetary policy.The U.S. GDP is expected to grow at a pace of 5.0% in the third quarter, versus the previous report's 4.9% increase. Meanwhile the U.S. PCE, the Fed's preferred inflation gauge, is expected to slump with a 3% growth rate from the 3.4% report the previous month. Gold is generally in demand amid high inflation but tight central bank policies are weakening gold's appeal.

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Source: ICDX Research