Last week ended with yet another new all-time high for gold, gaining a commendable 1.7% on Friday to close at a record $2,330 an ounce. The precious metal gained $100 over the course of the week, seemingly immune to everything else going on in the world of finance. Threats of delayed interest rate cuts have had no real dampening effect on gold, instead the safe-haven asset narrative is leading the price action. Just as on Friday, early trading in Asia is pushing gold to the downside this morning, whether or not the selling pressure will survive the opening bells in Europe and America remains to be seen.
Speaking of early morning trading, oil prices are taking a big hit today as Israel takes a more reconciliatory tone, withdrawing troops from Gaza and committing to fresh talks. Brent Crude and WTI already down 2% at the time of writing.
Friday also saw the publication of Non-Farm Payrolls figures, and they did not disappoint. The US economy added 303k jobs in March, beating the consensus of 200k jobs by 50%. The unemployment rate also fell from the previous month, down to 3.8% versus 3.9% in February. The data will do nothing to pressure the Fed into implementing a rate cut, but as Chairman Jerome Powell has stated, a strong jobs market is not necessarily a barrier to monetary easing as long as inflation remains under control. Speaking of which, wage growth slipped to 4.1% YoY in March, easing such inflationary fears.
Stocks were predictably thrilled with the news, recouping at least some of the losses from Thursday. The DJI clawed back 0.8% on Friday, beaten out by the S&P 500 and Nasdaq Comp, up 1.1% and 1.24% respectively.
Looking forward to the week ahead, there is very little to get excited about on the economic calendar today and tomorrow. Wednesday will see the publication of a slew of US inflation data, followed by FOMC minutes. We have the Chinese inflation rate early morning on Thursday, followed by the ECB’s interest rate decision, markets currently pricing in no change from the current 4.5%.
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