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Weak Export Data Hold CPO Price to Rise  - icdx.co.id
  • (08/05 - 15/05) ICDX Gold contract prices rose 2.23% for the week
  • COVID-19 second wave increasingly surfaced

Market Review

Gold closed last week with an increase of 2.23% to $ 1,743.60 per Troy Ounce following the tug of risk sentiment in the market from the continued tension between the US-China, and fears of a second wave of COVID-19 which suppressed market optimism about the discourse of easing restriction back into the surface.

The alert appeals that have been echoed since the beginning of the discourse on easing restrictions will be enforced in several countries, have now developed into new threats and concerns. From Asia, China reported a cluster of new infections, and South Korea had to close again around two thousand restaurants and bars after a series of new positive cases were suspected of being initiated by one person with no symptoms.

Nevertheless, the combination of bullish gold sentiment is still restrained by the continued swift interest of market players towards the US Dollar as an asset flight amid risk aversion. Also strengthening the position of the US Dollar last week, the statement of the head of the Federal Reserve, Jerome Powell who in the occasion of his speech responded to rumors circulating and stated that policy makers did not view negative interest rates as a possible monetary policy. Going forward, the Fed will continue to use monetary tools that have proven to be efficient.

However, amid the unchanged focus among market participants, analysts project that the '' path '' for gold in the future will remain in a high bid. New stimulants may still be extended by central banks with direction-less statements from a number of representatives regarding current economic environment.

Chart CPO 181105 - icdx.co.id

Price Performance Indicators

Previous Week % Change
GOLDUD $ 1,705.5 +2.23%
GOLDID Rp 25,598 + 1.55%
GOLDGR Rp 828,700 + 1.82%
XAUUSD $ 1,702.65 + 2.37%
COMEX $ 1,713.90 + 2.47%
USD/IDR Rp 15,009 - 0.67%

Market View

Second Wave to Hit Global Health and Gold Prices

Last week, most market participants were looking very reluctant to the development of COVID-19 cases, which the daily increase showed more than 80 thousand cases per day. Meanwhile, Chinese reported a new first cluster infected by COVID-19 last week. With that report, the second wave of COVID-19 case may cause fear to market and specifically move the safe-haven asset value, as the spreading of COVID-19 had caused economy drawback since early 2020. Will the fear of COVID-19’s second wave fuel the gold prices?

US-China, Trade War Heats Up?

The gold prices moved to its highest level since October 2012, with another round of retaliation happened last week. On Friday, US government blocked the chip supplies and blacklisted the telecoms company Huawei, spurring the risk of another trade war between US and China. As a result, the Chinese government implicitly state that they will do whatever it takes to protect their company. Will the fear of another trade war give another boost to the gold prices?

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Date Data/Events Actual Expectation Previous
19/May USD - Building Permits - 1.00M 1.35M
19/May USD - Fed Chair Powell Testifies - - -
20/May GBP - BOE Gov Bailey Speaks - - -
21/May AUD - RBA Gov Lowe Speaks - - -
21/May USD – Flash Manufacturing PMI - 51.0 52.0
22/May USD - Fed Chair Powell Speaks - - -
22/May EUR - German Flash Manufacturing PMI - 39.0 34.5
22/May EUR - German Flash Services PMI - 26.2 16.2

Sumber: Riset ICDX




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