Happy Friday, traders! Buckle up for the thrilling recap of the past five trading days, exploring the twists and turns that steered gold prices and influenced key assets.
Week’s Outcome: +2% Gold Gains
As we approach the holiday season, gold prices display resilience, set to close the week with a robust 2% gain. The driving force behind this strength is a shift in expectations for early 2024’s interest rate landscape.
A Bumpy Ride
Navigating through a rollercoaster of ups and downs, gold prices experience substantial volatility. Unlike recent months dominated by speculative discussions on monetary policy, this week’s focus centers on hard-hitting macroeconomic data.
CPI Drama Unfolds
Tuesday kicks off with the highly anticipated CPI report for October. Despite inflation showing a more-than-expected cooldown, gold reacts unexpectedly. Traditional wisdom suggests lower inflation is bearish for gold, yet markets interpret it as a signal that the Fed might halt its rate hikes.
Producers Price Index Impact
Following the initial surge, gold faces a setback when the Producers Price Index reveals deflation in manufacturing costs. The risk-on sentiment momentarily dents gold prices, but strong support, fueled by the belief in the end of Fed hikes, prevents a significant dip.
Jobless Claims Surprise
Thursday brings an unexpected twist as Initial Jobless Claims take the spotlight. Investors keen on more evidence for the Fed to conclude its current hiking cycle witness an uptick in unemployment claims. This unexpected turn triggers a familiar pattern: falling Treasury yields, a weaker Dollar, and gold’s surge, almost reaching $2000/oz.
The Weekend Pause
As the week concludes, gold prices consolidate around $1980. The mild retracement signals a brief pause in the action, setting the stage for potential Thanksgiving tranquility in the markets. With next week’s lighter schedule due to the holiday, gold’s ability to maintain gains in a quieter market becomes crucial.
Looking Ahead
As we brace for Thanksgiving and approach the final weeks of 2023, keep an eye on the FOMC meeting minutes on Tuesday. This profitable week may serve as a launching pad for gold’s trajectory in the coming weeks.
Traders, enjoy a well-deserved weekend break, and I’ll see you back here next week for another riveting market recap.