Price Performance Indicator
The gold contract GOLDUD has closed the week with a correction, which was significantly occurred at the end of the week, to record a weekly correction of 0.80% to $1,891.30 Troy Ounce. After the market absorbed the sentiment from the 3 employment data released on the previous week, this week the market's focus seems to be on the Greenback’s performance, especially with the anticipation and back-to-back market expectations on the Fed's future stance, which is based on recent data releases - inflation figures.
Inflation data released last week showed a fairly good increase in inflation, thus making some analysts to expect the increase could lead the series to its highest annual spike in the last 13 years. Adding to the positive issue, the consumer sentiment data released last Friday also managed to show a fairly good increase and both data succeeded in making the USD value appreciate against a number of other assets including gold.
Furthermore, the developments in inflation growth may affect the Fed's view of economic conditions, especially on interest rate developments, while in several statements by members of the Fed, a number of members are considering a change in the direction of US monetary policy. Finally, it's worth noting that the latest news on US policymakers' agreement on an eight-year, $1.7 trillion infrastructure spending plan, to be approved by the White House, offered a fresh ray of optimism to markets.
With these data and conditions, the market's focus is now shifting to the FOMC meeting scheduled this week, so that if there is a statement related to the optimism presented by recent economic data, it can affect the gold price even more severe.
USD May Be Guided by the Fed Meetings This Week
After USD pushed by several of positives data released last week and causing higher expectation on US economic recovery, this week scheduled FOMC Meetings will be the main focus for market players. Although no changes on interest rate were expected, market players are looking to additional cues from the Economic Projection regarding the terms and views from FOMC’s official. This event may causing the USD to move and eventually affecting the gold prices.
US – Retail Sales
US - PPI m/m
US - FOMC Rate & Projection Statement
US - Unemployment Claims
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