Price Performance Indicators

Gold focus :

1. ICDX gold price weakened -0.03% in a week (05/06 - 09/06).
2. US employment data.

Market Review

ICDX gold price was hit by -0.03% compared to the previous week influenced by US employment resilience data enabling policy interest rates to remain high. Market caution awaits the results of the Fed meeting scheduled for June 13-14 regarding the sustainability of interest rate policy.

The US Department of Labor reports Non-Farm Payrolls US with a sharp increase of 339K which beat expectations of 193K as well as the previous data of 294K. The positive data showed the previously released job openings data, US JOLTS JOB Openings, improved in April after being battered within the two previous months. The data showing the measurement of demand for labor increased to 10.1M, the previous month's data was revised to 9.75M from 9.59M. Significant US job growth confirms that a key part of the economy is continuing despite the Fed's aggressive rate increases since March last year. International Monetary Fund spokeswoman Julie Kozact said inflation momentum had slowed but remained an urgent concern and suggested the Fed needs to stick to monetary policy to ensure inflation is reduced.

Separate data showed the US unemployment rate hit a six-month high of 3.7% compared to the previous month's 3.4% increase. The non-manufacturing index by the Institute for Supply Management fell to 50.3 in May from 51.9 in the previous month and missed expectations of 52.6. This figure is close to the indicator level of 50, where the figure above still indicates industry expansion. The US Department of Commerce reported slower growth in factory orders, from a 0.6% increase in March to 0.4% in April.

Ukraine says the flooding caused by the collapse of the Nova Kakhovka dam has the potential to leave hundreds of thousands of people without access to drinking water and submerge tens of thousands of farmland. About 600 square km of the Kherson region in southern Ukraine was flooded following the collapse of the Kakhovka hydroelectric dam. Minister of Agriculture Mykola Solsky said the tragedy had cut off the water supply to 31 irrigation systems in the Dnipro, Kherson, Zaporizhzhia regions which irrigate 584000 hectares. Ukraine says Russia blew up the dam while Russia accuses Ukraine of sabotaging it. Rising geopolitical tensions between Russia and Ukraine pushed up demand for gold as a hedge asset amidst geopolitics uncertainty, creating a positive sentiment for gold.

Market View

Global GDP Growth Forecast and Interest Rate Policy Expectations

The World Bank released its forecast for GDP growth in 2023, up 2.3%, higher than the estimate issued last January of 1.7%. World Bank Chief Economist Indermit Gill said 2023 would still mark one of the slowest years of growth in the last five decades. Meanwhile the global growth forecast in 2024 was cut from 2.7% in January to 2.4% and the new forecast for 2025 global growth is 3.0%. The Fed's interest rate hike path is still the focus of market and US economic data is considered to assess the continuation of the US central bank's monetary policy. US CPI on an annual basis rose 4.0% in May which was the smallest annual increase since April 2021 and also lower than the previous month's increase of 4.9%, previously US annual CPI was projected to move at a 4.1% pace.

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Source: ICDX Research

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