Spot gold closed with a gain of almost 1% at $2657 on Friday; in this week it changed to +0.20%.
Collect data
US CPI data (September) was hotter than expected in all numbers: CPI mom came in at 0.2% (forecast 0.1%), while CPI yoy was recorded at 2.4% (forecast 2.30%). Yoy core CPI rose 3.3% (forecast 3.20%), the fastest pace since June, while mom core CPI came in at 0.30% (forecast 0.20%). Initial jobless claims rose 33K to 258K in the week ended October 5, the highest since August 2023 as claims continued at 1.86 million, higher than the forecast of 1.83 million. It is possible that hurricanes in the US may have a negative impact on project data, so future data will be looked to for a clear picture. from 70.10 in September, the first fall in three months. In addition, inflation expectations rose to 2.90% next year, the first increase in five months and up from 2.70% expected in September. came in at 2.80% (2.60% forecast).The PPI final demand came in at 0% (0.10% forecast) while the final PPI demand at 1.80% was hotter than the 1.60% forecast, although it was the most small. advance from February.
future data
Key US data on deck next week includes retail sales advance (September), Philadelphia business outlook (October), weekly jobs data, industrial production (September), NAHB housing market index (October) and housing starts (September). China’s data docket is quite heavy as it includes PPI and CPI (September), trade balance (September), new home prices (September), GDP (3Q), retail sales (September), industrial production (September), property investment (September). ), residential property sales (September) and the unemployment rate (September). In addition, China’s finance minister will hold a press conference on Saturday to outline fiscal stimulus.
Geopolitics
Israel continues to ponder whether to take action to retaliate against Iran over the latter’s missile attack at a Security Cabinet meeting on Thursday that was unclear. Meanwhile, Israel continues to attack Hezbollah in Lebanon with air and ground attacks. The US has expressed concern over the Iran-Israel conflict that is driving up energy prices and undermining the global economy. The Israel-Hamas war continues in Gaza without a ceasefire.
US Dollar Index and returns
The US Dollar Index has recovered quickly from the 100 support line as a stellar nonfarm payrolls report and warmer-than-expected inflation numbers have dampened the chances of aggressive Fed easing this year. The index, after rallying for nine days straight, ended a tad lower on Friday; However, it is up around 0.40% in the week. The US ten-year yield, up one bps to 4.10% on Friday, was up around 3% on the week, while the two-year yield at 3.96% was up around 0.70% on the week.
ETF
Total known global ETF holdings stood at 83.434 Moz as of October 10, slightly lower than the 83.54 Moz seen at the end of the week ending on October 4.
Outlook
Gold was driven by ETF inflows, safe-haven demand and disappointing US data. The fact that the metal rose on the week despite higher US yields and a stronger US Dollar is quite positive. Next week is a busy week on the data front. If geopolitical tensions remain high, gold could slide early in the week. Still, buying continues to be the preferred strategy. Overall, it is trading in the range of $2600-$2685, which may continue to hold unless geopolitical tensions increase. US retail sales data will be closely watched by traders.
Support is at $2640/$2625/$2600. Resistance is at $2675/$2685/$2700.
(The author is Associate Vice President, Fundamental Currencies and Commodities, Sharekhan by BNP Paribas)
(Disclaimer: Advice, advice, opinions and opinions given by experts are their own. This does not represent the views of the Economic Times)
