Price Performance Indicator
The gold contract GOLDUD closed last week's fluctuation with a deep correction of 3.29% to $1,786.10 per Troy Ounce. Gold prices fell with the pressure growing below the $1800 zone that occurred since the beginning of the trading session this week along with rising 10-year US bond yields – digesting some sensitive headlines from the US.
The increase in US bond yields makes gold assets less attractive, by making the cost of holding gold assets higher than holding US government bonds. One of the reasons for the increase in US bond yields was market expectations that rose again on the possibility that the Fed would accelerate the process of normalizing US interest rates to counter the effects of rising inflation rates which were quite significant in recent times.
Behind that, one of the main catalysts that market participants have been closely watching is the choice of Fed Chair by Biden which was announced in the middle of the week. President Joe Biden's proposed nomination of Jerome Powell to hold the post of Federal Reserve Chair for another four years seems to have provided certainty over monetary policy and ultimately led to a decline in gold's appeal as a safe-haven asset.
Meanwhile, in terms of data, in lastest release of US economic data, US GDP data was released slightly below market estimates but still better than the previous period, meanwhile inflation through PCE data was released as expected. On the other hand, US jobless claims data showed a decline in demand for jobless claims. With the third position of the data, the value of the USD is still rising, but the correction in the US bond yields has led to the restraining of pressure on gold prices in the short term.
Looking ahead, the market's focus will continue to be on the performance of the USD and the issues that will develop next week. Issues related to tapering are still the focus of the market, while next week a number of important data will be released including data on the first-tier employment sector, and manufacturing and service sector activity, which can reinforce US economic growth – and closed by a speech from Fed Chair Jerome Powell.
As per market concerns, the variant of the coronavirus, now officially known as Omicron, which was first detected in South Africa on Thursday last week, has reportedly spread to a number of countries. The World Health Organization (WHO) on Sunday reported that the variant has also been detected in Australia, Belgium, Botswana, the UK, Denmark, Germany, Hong Kong, Israel, Italy, the Netherlands, France and Canada. WHO warned of the potential for faster transmission than previous variants. So far many countries have imposed travel bans or restrictions on South Africa. This could be the main wait for gold prices, given that the pandemic headlines also continue to steer the appeal of safe-haven assets such as gold in the market.
30 Nov & 1 Dec
US – Fed Chair Powell Testifies
US - ADP Non-Farm Employment Change
US - ISM Manufacturing PMI
US - ISM Services PMI
US - Average Hourly Earnings m/m
US - Non-Farm Employment Change
US - Unemployment Rate
US - Treasury Currency Report
Riset Indonesia Commodity and Derivative Exchange
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