Gold Drops Sharply Below $2400 Again

Gold Drops Sharply Below $2400 Again

Gold prices fell sharply during today’s trading session on Friday,
settling once again below the $2400 per ounce level.

 

 

Topic

Gold

Hedge Funds

China 

 

 

 

 

 

Gold 

Prices were clearly affected by profit-taking on the precious metal,
along with the rising U.S. dollar index amid uncertainty surrounding U.S. interest rates,
especially after former President Donald Trump urged the Federal Reserve not to cut rates before next November.


As for today’s trading session, spot gold prices decreased by 1.82%,
recording approximately $2399 per ounce. Additionally, gold futures prices dropped by 2.09%
or $51 per ounce, trading near $2405 per ounce.

 

 

Hedge Funds 

Hedge funds have raised their bets on gold to the highest level in four years.
Money managers’ bets on gold have jumped to the highest level in four years,
indicating investors’ concerns about the U.S. presidential election campaign,
as well as a renewed focus on the timing of interest rate cuts by the Federal Reserve.


Gold had reached its all-time high of $2483.73 per ounce last Wednesday.
This came as traders intensified their bets on deeper monetary easing
and sought a safe haven in the precious metal amid rising geopolitical risks.

 

 

 

 

China 

China’s imports of Saudi oil dropped by 14% in June year-on-year.
China’s total imports of crude oil from Russia, its largest supplier,
rose by 5% in the first half of this year as refineries rushed for lower-priced crude,
while imports from Saudi Arabia, its second-largest supplier, fell.


Data showed that shipments received by China from Saudi Arabia in June fell by 14% year-on-year to 6.82 million tons. Shipments from the Kingdom have decreased by 13% year-on-year since the beginning of the year to 40.38 million tons, equivalent to 1.62 million barrels per day.


Total imports from Russia, including via pipelines and shipments,
in June fell by 20% year-on-year to 8.43 million tons, or 2.05 million barrels per day,
according to data from China’s General Administration of Customs.


This is down from 2.1 million barrels per day in May and also down from June 2023
when the record high of 2.56 million barrels per day was recorded.

 

 

 

 

Gold Drops Sharply Below $2400 Again

 

Rises in Gold Prices

Rises in Gold Prices:

Global gold prices rose for the third consecutive session on Thursday,
as investors await U.S. inflation data due later today for further guidance on the Federal Reserve’s interest rate path.
The weakening dollar made gold more attractive to investors holding other currencies.

 

Topic

Details

Jerome Powell

 

 

 

 

Details:

Investors are awaiting the Consumer Price Index (CPI) report for June, set to be released at 3:30 PM Riyadh time,
as well as the Producer Price Index (PPI) report on Friday.
They anticipate that these data will bolster optimism that the Federal Reserve will be able to cut interest rates this year.
Any unexpected decline in the CPI report could weaken the dollar and push gold prices towards the $2400 level.
Meanwhile, Federal Reserve member Lisa Cook stated that inflation in the United States should continue to decline without a significant increase in the unemployment rate.
Another record high could be achieved this year if any geopolitical shock occurs. Gold is considered a hedge against geopolitical turmoil, and its appeal tends to rise when interest rates are low.

 

 

 

 

 

Jerome Powell

Meanwhile, Federal Reserve Chairman Jerome Powell said on Wednesday
that the central bank will make decisions on interest rates “as and when” they are needed.
He told members of the House of Representatives on Tuesday that “more good data” could bolster the case for a rate cut. Powell indicated that the U.S. economy is on track to achieve a soft landing, stating,
“There is a path to returning to full price stability while maintaining a low unemployment rate,
and we are working hard to stay on that path.
” Traders currently estimate a 46% probability that the Federal Reserve will cut interest rates by two steps by the end of the December meeting, and there is a 73% chance of the first cut in September.
As for gold prices, gold futures prices rose during last Wednesday’s trading,
absorbing the content of Federal Reserve Chairman Jerome Powell’s testimony before the House of Representatives.
At present, gold futures are up 0.23% to $2385 per ounce.
Meanwhile, the dollar index is down about 0.05% to 104.670 points.

 

 

Rises in Gold Prices

 

Drop in Gold Prices

Drop in Gold Prices

Gold prices witnessed a decline during Monday’s trading as investors took profits
after gold reached its highest level in over a month in the previous session.

This price increase was driven by growing expectations of a U.S. interest rate cut in September.

 

Topic

Gold

Jobs

Inflation

 

 

 

 

 

Gold

Economic data showed that the unemployment rate in the United States reached its highest level in two
and a half years at 4.1%, indicating a weak U.S. labor market.
The U.S. economy added 206,000 new jobs in June, following an addition of 218,000 jobs in May,
close to the expectation of 200,000 jobs.

Profit-taking today followed a significant rise in gold prices last Friday after labor market data.
Markets now see a 78% chance of a rate cut by the Federal Reserve in September,
with traders also anticipating a potential second rate cut in December.

The market’s focus this week is on the Federal Reserve Chairman’s testimony
before Congress and comments from central bank officials,
in addition to U.S. inflation data, which analysts consider as ideal catalysts for gold prices.

 

 

 

 

 

Jobs

Last Friday’s jobs report:

The lower-than-expected reading of the previous jobs report showed a significant slowdown in the labor market.
U.S. non-farm payroll data was generally weaker than expected.
The report was weak overall compared to expectations, with downward revisions lowering the average employment pace over three months to 177,000 from the previous data of 249,000.

Industrial sector jobs were weak, with government and healthcare sector jobs accounting for three-quarters of job gains in June, while many cyclical industries lost jobs.

The household survey was also weak, with the unemployment rate rising by 0.1 percentage points to 4.1%
as the labor force increase of 277,000 offset the household employment increase of 116,000.

 

 

 

 

 

 

Inflation

Inflation Report:

Investors will focus on the upcoming inflation report, which is considered the main event for the next week.
Last week, the U.S. labor market showed some signs of moderation,
with non-farm payroll numbers increasing by 206,000, slightly down from May.
The unemployment rate rose slightly from 4% to 4.1%, exceeding the Federal Reserve’s forecast of 4%.

Inflationary pressures also showed some signs of easing,
with the Institute for Supply Management’s prices paid index posting lower-than-expected numbers,
aligning with the lowest rates since the end of the pandemic.

 

 

Drop in Gold Prices

 

What Comes After Gold’s Rise

What Comes After Gold’s Rise:

Gold prices saw a strong increase during yesterday’s trading.
This rise occurred despite the strengthening of U.S. economic data,
which has bolstered hopes that the Federal Reserve might lower interest rates next September.

 

Topic

details

 

 

 

 

 

 

details

U.S. economic data released on Wednesday, including the service sector PMI and ADP employment reports, showed a slowdown in the economy. A separate report also indicated an increase in initial claims for U.S. unemployment benefits last week.

 

Traders are now eagerly awaiting the release of the U.S. non-farm payroll data scheduled for Friday.

 

The weaker-than-expected service sector PMI report was the gift that the Federal Reserve’s doves were waiting for before the release of the non-farm payroll report. Additionally, gold rising to $2400 is possible if the non-farm payroll report confirms the economic slowdown.

 

At the same time, Federal Reserve officials acknowledged at their last meeting that the U.S. economy seems to be slowing down, but they still recommend a wait-and-see approach before committing to rate cuts.

 

What Comes After Gold’s Rise

Gold and Expected Growth Paths

Gold and Expected Growth Paths:

Global gold prices rose during this period of trading on Wednesday,
as investors await the minutes of the latest Federal Reserve policy meeting for new signals
about when the U.S. central bank might start cutting interest rates.

 

Topic

Details

 

 

 

 

 

Details:

The gold market has been moving within a narrow range for a few weeks now, and bullion prices may rise later this year with the start of election season around the world. Ahead of the release of the Federal Reserve meeting minutes, Chairman Jerome Powell said on Tuesday that the United States has returned to a “deflationary path,” but policymakers need more data before cutting interest rates to ensure that recent weaker inflation readings reflect the true state of inflation and the economy.

 

 

Powell noted that the slowdown in the core personal consumption expenditures (PCE) rate to 2.6% in May shows the effectiveness of the Federal Reserve’s monetary policy and that the bank wants to ensure that these levels are a true reading of core inflation. Meanwhile, investors are awaiting ADP employment data and weekly jobless claims data scheduled for release later today, in addition to the non-farm payroll (NFP) report due on Friday. Market analysts believe that the release of this week’s non-farm payroll report could influence expectations for an interest rate cut.

 

Gold and Expected Growth Paths

 

Gold Prices Decline

Gold Prices Decline

Global gold prices have declined during current trading on Monday,
following sharp selling in the previous session.
This drop is driven by stronger-than-expected U.S. job data.
Investors are now anticipating the upcoming U.S. Federal Reserve meeting this week.

 

Contents:

 

 

 

 

Gold:

Gold prices fell by 3.5% on Friday, the largest drop since November 2020.
This decline followed the release of U.S. job reports and Chinese data indicating that the world’s largest gold consumer ceased its purchases in May after 18 consecutive months of buying.

The People’s Bank of China announced today that its gold reserves remained unchanged at the end of May.
This follows purchases of only 60,000 ounces in April and 160,000 ounces in March.

 

 

 

 

 

 

Bitcoin:

 Bitcoin’s Continued Rise:

 Significant investments from major shareholders and institutional investors are supporting the prices of Bitcoin and Ethereum, leading to an overall market recovery.

Interestingly, some stocks have surged tenfold alongside the rise in Bitcoin and the cryptocurrency market.
There is a rapid increase in the total balances held by major Bitcoin holders and top investors.
Over the past 30 days, major Bitcoin holders have accumulated 70,000 Bitcoins,
the highest increase since late April.

Daily inflows from new significant Bitcoin investors have reached $1 billion,
comparable to the accumulation period in 2020 when Bitcoin surged from $10,000 to $70,000.
Additionally, purchases by U.S. spot exchange-traded funds (ETFs) have increased,
with total holdings rising from 819,000 Bitcoins on May 1 to 859,000 currently.

 

 

 

 

 

 

Wages:

 Wage Growth in the United States: 

The United States saw job growth in May, with wages increasing at a faster pace,
prompting traders to reconsider expectations for interest rate cuts by the Federal Reserve.

A report from the Bureau of Labor Statistics on Friday indicated that non-farm payrolls rose by 272,000 jobs last month, surpassing economists’ forecasts.
Average hourly earnings increased by 0.4% compared to April and by 4.1% over the past year,
which is higher than the previous report.

However, the unemployment rate, derived from a separate survey, rose to 4% from 3.9%,
marking the highest level recorded in over two years.

 

 

 

Gold Prices Decline

 

Strong Decline in Gold

Strong Decline in Gold

Gold prices witnessed a decline in the Asian trading session today, Thursday,
mainly due to the strength of the dollar and U.S. Treasury yields.

 

 

 

Content

 

 

 

 

 

 

Gold 

This situation has led to a slowdown in market activity,
as traders await key economic readings expected to impact interest rates.
As a result of this trend, there were negative flows from gold,
leading to a decrease in its value and moving it away from the record levels it reached last week.
The yellow metal lost most of the gains it had made this week.

 

 

 

 

 

U.S. Indices

 Decline in U.S. Indices

 U.S. markets saw a decline in stock indices during the current trading session on Wednesday.
Nvidia, which had been leading the market in previous days,
faced difficulties in the current trades, causing concern among traders due to rising U.S. Treasury yields.
The Dow Jones Industrial Average fell by 326 points, or 0.8%.
The S&P 500 Index decreased by 0.6%, and the Nasdaq Composite Index dropped by 0.4%.
This decline comes as the dollar index approaches the 105-point level, significantly lowering global gold prices.

 

 

 

 

Yen

 Rise in the Yen

 The Japanese yen rose in the Asian market on Thursday against a basket of major and minor currencies.
This is the first rise in three days against the U.S. dollar.
The increase is part of efforts to recover from the lowest level in four weeks,
driven by increased buying activity from low levels.
These developments come amid important events in the Japanese bond market,
where the yield on ten-year government treasury bonds reached a new record level in 13 years.
This rise enhances investment opportunities in the Japanese yen.

 

 

Strong Decline in Gold

Decline in Gold Prices

Decline in Gold Prices

Global gold prices witnessed a significant decline for the third consecutive session during Thursday’s trading,
following the release of the latest Federal Reserve meeting minutes,
which indicated a tendency among some officials to raise interest rates.

 

Topic

Gold

Market Indices

Oil

 

 

 

 

Gold

Despite the current monetary policy indicating that
the U.S. central bank’s benchmark interest rate will remain at its current level,
the minutes released on Wednesday also reflected discussions about the possibility of further increases.
Gold was shocked after the minutes made it clear to investors that interest rate cuts are not imminent.

 

 

 

Market Indices

Decline in U.S. Stock Indices

U.S. stocks fell at the end of Wednesday’s trading, with the indices registering losses in the oil and natural gas,
public utilities, and basic materials sectors.
At the close of the New York session, the Dow Jones Industrial Average closed down by 0.51%,
the S&P 500 declined by approximately 0.27%, and the Nasdaq decreased by about 0.18%.

 

 

 

 

Oil

Increase in Oil Prices

In the Asian session on Thursday, crude oil contracts saw an increase.
The price of crude oil contracts for July reached $77.30 per barrel at the time of writing,
marking an increase of 0.35%. Previously, crude oil contracts were traded at $77.33 per barrel in an earlier session.
Crude oil could find support at $76.83 and resistance at $80.60 per barrel.

 

For the dollar index contracts, which measure the performance of the U.S. currency against a basket of six major currencies, it decreased by 0.04% to reach $104.79 for trading.
The price of Brent crude for July decreased by 0.24% to reach $81.70 per barrel.

 

 

 

Decline in Gold Prices

 

Gold Soars to Record High Amid Hopes of Rate Cuts and Investor Hedging

Gold Soars to Record High Amid Hopes of Rate Cuts and Investor Hedging

Gold reached a new record high due to growing optimism that
the Federal Reserve will begin easing its monetary policy this year,
coupled with escalating geopolitical tensions in the Middle East.

 

Topic

Gold

Gold as a Safe Haven

 

 

 

 

Gold

Gold prices jumped 1.1% to $2,440 per ounce in Asian trading upon market opening,
surpassing the previous record set in April.
Traders have recently increased their bets on the possibility that the Federal Reserve will cut borrowing costs at the beginning of September, a scenario that would support the price of gold, which does not yield interest.

Last week, the US dollar fell and Treasury bonds rose after data released on Wednesday showed that the inflation rate in April declined more than expected.
This provided support for the precious metal, which is priced in dollars.

 

 

 

 

 

Gold as a Safe Haven

Spotlight was on gold as a safe haven today, Monday, after a helicopter carrying Iranian President Ebrahim Raisi crashed in dense fog yesterday. This news heightened the sense of increasing geopolitical risks in the region, especially after the Houthis launched a missile at an oil tanker heading to China in the Red Sea on Saturday.

 

The rise in gold prices is driven by this news and the uncertainty surrounding what happened in Iran. Assumptions about the potential impact of these events, which have limited information, might emerge, and investors may hesitate to sell their gold holdings due to low liquidity levels in Asia.

 

Hedge funds trading futures contracts on the COMEX boosted their bullish bets on gold to the highest level in three weeks during the week ending May 14, according to the latest data from the Commodity Futures Trading Commission.

 

The spot price of gold rose to $2,450 per ounce during today’s trading. The Bloomberg Dollar Spot Index was steady after falling last week to its lowest levels in over a month. Meanwhile, prices of silver, palladium, and platinum also increased.

 

Silver traded near its highest levels in 11 years, following a strong rise on Friday supported by positive sentiment in other metal markets. Tightening supplies have spurred investor demand for materials like copper. Unlike gold, the white metal is also considered an industrial commodity due to its use in things like solar panels.

 

 

Gold Soars to Record High Amid Hopes of Rate Cuts and Investor Hedging

Rise in gold prices

Rise in gold prices

Gold prices have risen during the current session on Wednesday as investors await
the release of inflation data in the United States,
which may provide indications about the path of interest rate cuts by the Federal Reserve.

 

Content:

 

 

 

Gold

The U.S. consumer price index data is scheduled to be published at 15:30 Saudi time.
According to a Reuters survey, the data is expected to show that
the core inflation rate in April rose by 0.3% on a monthly basis,
a decrease from the previous month’s rate of 0.4%.

 

 

 

 

Inflation

Today’s inflation data:

Global markets are awaiting the release of the U.S. consumer price index (inflation rate) for the past April,
set to be released today, Wednesday.
This data is expected to have a strong impact on market movements in subsequent trading,
particularly on the value of the U.S. dollar.
Based on this, today’s expected inflation data will determine whether the previous price decline was temporary,
and thus inflation may decrease in the coming period,
or if the U.S. Federal Reserve faces more significant challenges in containing inflation.

 

 

 

 

 

 

Indicators

Rise in U.S. stock indices:

U.S. stocks ended Tuesday’s trading session on a rise, with indices climbing and sectors like technology,
finance, and consumer goods gaining.
At the end of the trading session in New York, the Dow Jones Industrial Average closed up 0.32%,
reaching its highest level for the month.
Additionally, the S&P 500 continued to strengthen its position with a 0.48% increase,
while the Nasdaq rose by approximately 0.75%.

 

 

Rise in gold prices