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Gold focus :

• ICDX’s gold prices gained 0.52% in a week (1/8 - 5/8).
• Weak economics US Data and China - US tensions

Market Review

ICDX’s gold price ticked 0.52% higher than previous week as the release of US manufacturing activity showed slowed economic conditions and US House Of Representatives Speaker Nancy Pelosi visited Taiwan.

US manufacturing activity slowed as the release of US ISM Manufacturing PMI by Institute of Supply Management showed lower than previous at 52.8 and US Construction Spending m/m by Census Bureau at -1.1%, far from forecast. The worsening US manufacturing performance pointed out a slowdown in the US economy which raised expectations for the Fed to be less aggressive to toned-up interest rate hike became a supporting factor for gold prices.

US House Of Representatives Speaker Nancy Pelosi visited Taiwan on Tuesday, 2 August 2022. China responded with a mass military drill at six zones around Taiwan Strait and launched projectiles and ballistic missiles near the China - Taiwan border. US - China heated tensions boosted gold demand as gold considered as a safe store during geopolitical  uncertainties. 

Market View

Gold movement strongly relies on The Fed’s plan on rising interest rates. The release of US Annual Inflation Rate on Wednesday, 10 August 2022 is expected to give clear vision on The Fed further interest rate hikes. Gold is a preferred asset amids inflation for hedging but higher interest rates will make gold demand dimmed because it offers less return than financial instruments.

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