Little movement

New Year’s resolutions often include exercising more. While gold prices were somewhat livelier in the first week of January, the same can hardly be said for the week ending today.

Overall, the financial markets remained cautious from Monday to Wednesday as market participants awaited the week’s data highlight. The US report on consumer prices for December was due on Thursday and entailed hopes for clues on how the US Federal Reserve would tackle the issue of the interest rate turnaround over the course of the year. It is true that consumer prices rose to a slightly higher level than had been expected by analysts on average, but the immediate market reaction was short-lived. The rise in government bond yields and the US dollar were quickly levelled out, and gold prices, which had been briefly down, also recovered to their starting level.

By and large, gold traded mostly within sight of the 2,030 US$ per ounce mark this week. This morning, buying was up as the precious metal was in demand due to the uncertain geopolitical situation in the Middle East.

Focus on US data

Last Friday, gold still traded at 2,046 US$ per ounce. Prices initially dropped noticeably on Friday afternoon after the US labour market report at first glance appeared better than expected. Gold jumped to 2,064 US$ per ounce following unexpectedly weak data on the ISM services index in the US, a highly regarded leading indicator of short-term economic development. Gold then receded back to its morning level on Friday evening and, as mentioned, traded in a manageable range around the 2,030 mark over the course of the week. After the US inflation data, the yellow metal fell to 2,013 on Thursday, but recovered quickly to a robust 2,039 US$ per ounce at the start of trading today.

Xetra-Gold slightly weaker

The price of Xetra-Gold also dropped slightly week on week, partly due to the somewhat firmer euro/US dollar exchange rate. It initially traded at 60.20 € per gram on Friday last week. After reaching a weekly high of 60.30 on Friday afternoon, it slackened to 59.15 over the course of the week following the US inflation data. This morning, it was expected to start trading noticeably higher around 59.75 € per gram.

Next week kicks off with a public holiday in the US, and it will likely be a somewhat transitional week for the markets before the major central banks discuss their monetary policy at the end of the month. 
I wish all readers a pleasant weekend.