Gold remains in demand

While the German national soccer team bowed out of the race for the European Championship title early, gold is showing its prowess. After silver, it is the strongest-performing precious metal thus far this year, remaining in the running for the finals, so to speak. This week, however, we have not exactly seen joyous fireworks in trading on the financial markets. Last Friday, things looked different, with US June labour market data moderately weaker than expected. Job gains in the previous two months had been revised noticeably downwards, unemployment was slightly up and growth in average hourly wages had dropped moderately.

US interest rate and consumer prices

What the markets were presented with, therefore, was a somewhat mixed labour market report. The interest rate futures markets accordingly fully priced in two rate cuts for the Fed by the end of 2024 – notable since the Fed had in June only projected one rate cut for 2024. This resulted in lower yields and slight depreciation pressure on the US dollar, creating a tailwind for gold prices. Apart from stocks, the markets have been somewhat lethargic so far this week. This afternoon will see the publication of the US consumer price data for June, the highlight of the trading week’s economic data. In the run-up to this release, most traders are likely to have remained on the cautious side.

Weekly roundup: gold price trends

Last Thursday morning, gold still traded at 2,357 US$ per ounce and had climbed to around 2,393 by Friday evening following the above-mentioned US labour market data. With the new week, profit-taking set in, causing gold prices to slide to around 2,350 by Tuesday afternoon. Yesterday, however, it returned to 2,386, a level that prices were not quite able to defend: At around 7:00 this morning, gold starts European trading at around 2,382 US$ per ounce.

The price of Xetra-Gold initially rose from 70.25 € per gram last Thursday morning to 70.80 following the US labour market data on Friday but also set back to 69.95 on Tuesday, before climbing to their weekly high of 70.90 yesterday afternoon. This morning, Xetra-Gold is likely to start the day at around 70.70 € per gram. The euro/US dollar exchange rate has remained fairly steady throughout the week.

What’s up next?

US consumer price data will be released this afternoon. Market liquidity is declining sharply due to the summer holidays, with many market participants presumably reducing their positions as schools’ summer breaks are fast approaching. We will soon find out to what extent this could lead to a slight increase in fluctuations on the gold market.

I wish all readers a sunny weekend and, if applicable, a happy start to their summer vacation.