The main news doing the rounds for the week was from US- minutes of the recent FOMC meeting and the non-farms payroll report.
Apart from the macro reports there were the following financial reports that were out in the week.
- US non-manufacturing PMI, factory orders and trade balance monthly reports.
- Europe, MPC rate
- The EU flash CPI
- Unemployment report,
- GB’s manufacturing PMI
- Germany retail sales
- The French trade balance.
- In China, CPI and trade balance
- And several economic reports from Canada and Australia.
Gold was seen to have a positive start for the week as it firmed above $1200 an ounce on Tuesday hitting a near three-week high, as tumbling global equities and concerns over Greece’s future in the euro zone prompted investors to seek safety in the metal.
The uncertainty behind the euro zone is once again tempting investors to run after gold as a safe haven asset. This risk off sentiment in the markets may help bullion be stable at its recent upswing.
Adding to this we also saw that holding in the world’s largest gold-backed exchange traded fund- the SPDR Gold trust, rose 0.25 per cent to 710.81 tonnes on Monday, though still near a six-year low. But this rise did reflect improving investor sentiments towards gold.
Bullion traded in a ranged manner for most part of the week while volatility was high on Friday. The Greenback jumped on likely positive economic reports from the US coming week whereas speculation increased that Fed might talk about raising interest rates as also anticipated from its monetary policy minutes report due next week and likely putting weight on Bullion.
The forthcoming labor reports are expected to create added significance as there are expectations that the Federal Reserve in on the verge of raising interest rates. The current market consensus is that rates will rise in mid-2015 although this is a moving target that will be dictated by jobs and inflation data.
As said earlier, too gold is one such commodity which takes price direction from macro developments rather than its own demand-supply wherein we feel downside risks for the commodity may stay in the near future.