Threats of escalation, drone strikes, calls for condemnation and restraint surrounding the Israeli-Iranian conflict all contributed to choppy trading conditions in gold markets over the weekend. Last Friday saw yet another record high for the precious metal, briefly reaching above $2,430 an ounce before a heavy retrace hammered prices back down to close the day 1.2% in the red. If a continuation of the downward pressure was expected this week, then so far it hasn’t materialised, as gold yet again continued to rise in early trading in Asia.
Markets at large appear to have accepted the fact that the Federal Reserve is not going to implement an interest rate cut any time soon, as evidenced by the continued strength of the Dollar. The DXY did just enough to earn a close above 106 on Friday, a level not seen since November last year. Higher than expected inflation numbers continued to be a lingering cause for concern last week, as did a stronger than expected labour market. The initial uptick in prices observed early in the year can no longer be safely attributed to seasonal deviations, as was originally hoped.
Looking forward to the week ahead, Monday will be dominated by American retail sales, followed on Tuesday by a variety of Chinese metrics, including retail sales of their own, industrial production, unemployment rate and GDP figures. Later on we have US jobless claims on Thursday, followed by more retail sales on Friday, this time from the UK. Economic calendar aside, barring any real moves to deescalate tensions in the Middle East, market participants may have to expect the unexpected again this coming week.
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