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Gold Prices Decline for Fourth Consecutive Week

Gold Prices Decline for Fourth Consecutive Week

gold-price-falling


The safe haven precious metal is down 6.24% over the past four weeks, with prices closing at $1212.50 an ounce on Friday - posting a 14-week low. Expectation of a Fed rate hike this summer has supported a broad rally in the US dollar index. Gold price is down by more than $90 an ounce in the month of May alone after prices briefly traded near the $1300 handle in late April.

Weekly Review - Greece Gets Another Bailout


This week Eurogroup members approved another bailout deal for Greece, unlocking 10.3 million euros in financial aid. The approval came after last Sunday’s Greek Parliament approved a second round of austerity measures. The country is expected to receive the first part of the bailout in early June. Meanwhile, economic data from the Eurozone showed that the preliminary flash composite PMI fell to a 16-month low suggesting that growth was likely to slow into the second quarter. German GDP revision saw an unchanged print, confirming that economic growth surged in the first quarter of 2016, rising at a pace of 0.70% in the first quarter of the year.

In the UK, revised GDP estimates saw no change, illustrating that the UK's economy grew 0.40% in the first quarter. Business investment was revised lower by -0.50%, notching a second consecutive quarterly decline. The sterling was however unfazed, and in fact strengthened by opinion polls which suggested that the Brexit 'Stay' camp was garnering a stronger than expected lead.

In the US, revised GDP data for the first quarter showed that the economy grew at a pace of 0.80%, up from preliminary estimates of 0.50%. Economic data was broadly positive this week as durable goods orders increased 3.40% on the headline. The housing sector also saw a broad improvement as pending home sales jumped 5.10% monthly, up from a revised 1.60% in March.

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The Week Ahead - China's PMI to be Reported


The markets look to a slow start on Monday with the UK closed due to the Spring Bank Holiday while the US markets are closed on Memorial Day. Picking up steam, Canada's GDP data for March is expected to see no change while the first quarter’s annualized GDP may likely surge to 2.80%, up a whole 2.00% from 0.80% in the previous quarter. US PCE price index data follows, which is forecast to rise towards 1.60%, the same as in March while the headline print is expected to rise 1.10%.

With the new month beginning on Wednesday, PMI numbers will be in focus. China will be releasing their manufacturing PMI which may teeter on the brink of contraction at 50.0, while the Caixin manufacturing PMI is expected to weaken to 49.2 from 49.4.

The big event for the week will be monthly nonfarm payrolls, due on Friday in the US. The data will be the final payroll report ahead of the FOMC meeting in the following weeks. Unemployment rate in the US is expected to improve to 4.90% from 5.00% while the average change in nonfarm payrolls is forecast to hit 160,000, rising the same pace as in April.

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