Gold leaves the 14-month top behind

Weekly Report - 09/06/2019

Gold and Interest Rates


On Monday the popular yellow metal Gold fell from a 14-month top following an arrangement between the United States and Mexico to avoid a tariff battle. That weakened the safe-haven demand for the yellow metal.

U.S. gold futures dropped almost 1% to $1333.69 an ounce.

Spot gold fell 0.7% to $1,330.45 per ounce. In the previous trading session, the gold scored its highest since April 19, 2018, at $1,348.07 an ounce. Lee Cheong Gold Dealers chief dealer said “Talks between the U.S. and Mexico seem to have smoothened out already and the gold market seems to have lost its safe-haven appeal a little bit,” and added “However, hopes that the U.S. Fed will reduce the interest rate is still looking a little positive for gold.”

The Week that was

Last Friday U.S Stocks went higher. Their growth came after strong weekly profits, while poor economic data raised the chances of softer monetary policy from the Fed.

The U.S. economy totaled 75,000 jobs in May, noting the second time in more than 3 months that jobs growth added less than 100,000. Experts expect that Dow Jones will grow to 180,000 jobs.

The Dow Jones Industrial Average ended higher by 263.27 points to 25,983.93, driven by profits in Apple and Microsoft. The Nasdaq Composite advanced 1.7% to 7,742.09. In more positive news on Friday, the U.S and Mexico came to an agreement to avoid a tariff dispute with Mexico. The two countries agreed to immediately extend a controversial refugee program and expand security capabilities to stop the flow of illegal Central American migrants.


Main Focus This Week

On Wednesday morning the RBA Governor Kent speaks with ECB President Draghi. Due to last week’s ECB press conference and EUR profits, Draghi may put more pressure on EUR.

Another important event will be the BoE Governor Carney's speech that is scheduled later in the week. The markets will be watching for any indications of a change in direction. Carney recently spoke of a possible need to drive rates higher to control inflation.


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