For a long time, traders considered American Non-farm Payrolls (NFP) the most important release in the market. However, the situation has changed. Now US CPI moves financial markets.
Gold heads north on decelerating global surge
On Friday, gold jumped due to the fact that dismal data in the euro zone drove traders to the safe-haven asset.
Additionally, business sectors across the European Union went down in preliminary data outcomes in March, with German manufacturing shrinking to its slowest outcome for six years.
As some financial analysts, it’s all about the weakness in the EU economy as well as interest rates that makes holding the yellow metal more appealing.
On the Comex exchange, April delivery gold futures went up by 0.5% trading at $1,313.15 an ounce.
The dive in EU data backs the Fed’s dovish stance on Wednesday because the major US financial institution is still concerned about the economic surge in America and worldwide.
The yellow metal is extremely sensitive to interest rates because lower rates normally put pressure on the evergreen buck and ramp up investor interest in non-yielding bullion.
An inversion in the American Treasury yield curve also generated fears among market participants. The yield curve for the American 3-Month Treasury, as well as the American 10-Year, reversed for the first time since 2007 that could point to a meltdown.
Aside from that, Brexit uncertainty has also contributed to backing gold.
The European Union has provided Great Britain with time until May 22 to depart from the EU, provided the UK Parliament passes Prime Minister Theresa May’s Brexit agreement next week. However, if the bill isn’t approved, the European bloc has postponed the official departure date by two weeks to enable the UK legislative body time to come up with a fresh solution and prevent Great Britain from crashing out without an agreement.
Meanwhile, silver futures dived by 0.1% being worth $15.428 a troy ounce.
As for copper futures, they rallied by about 1.6% hitting $2.860 a pound.
United States Bureau of Labor Statistics will release monthly average hourly earnings, non-farm employment change (NFP), and unemployment rate on November 5, 14:30 GMT+2.
United States Bureau of Labor Statistics will release monthly average hourly earnings, non-farm employment change (NFP), and unemployment rate on October 8, 15:30 GMT+3.
Main news that will drive the market in the upcoming week include CB Consumer Confidence Index, Canadian GDP, and US Core PCE Price Index
The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.
Every week we expect many interesting events that can shake the market.