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

 

ECB Likely to Delay Rate Cuts Until September

ECB Likely to Delay Rate Cuts Until September.

Estimates indicate that the European Central Bank will maintain its tight monetary policy unchanged at its upcoming meeting on Thursday.

 

Content:

 

 

 

 

 

European Central Bank

Traders are likely to closely monitor the meeting for any clues
from Christine Lagarde regarding a potential rate cut in September.

 

Gold 

Gold prices rise to a two-month high thanks to Powell’s statements.

It prices hit a two-month high as hopes for a rate cut rise following statements from the Federal Reserve Chairman. Federal Reserve Chairman Jerome Powell said that the three inflation readings during the second quarter of this year showed “further progress” in bringing the pace of price increases back to the Federal Reserve’s target.

 

 

 

 

 

Dollar 

The dollar declines as investors bet on Trump’s victory and Powell’s statements.
It retreated from the high levels it reached earlier on Monday,
following statements made by U.S. Federal Reserve Chairman Jerome Powell,
while cryptocurrencies rose thanks to bets that the assassination attempt on former President Donald Trump would boost his re-election chances.

 

 

 

ECB Likely to Delay Rate Cuts Until September.

Rise of the Japanese Yen

Rise of the Japanese Yen: The Japanese Currency, the yen, surged against most major and minor currencies last week.
This was due to the decline in U.S. bond yields, which supported the yen gains.

The yen moved away from its 38-year low thanks to the intervention
of the Japanese central bank in the foreign exchange market to halt the excessive weakening of the local currency.

 

Contents

Decline in Gold Prices

Rise of the Japanese Yen

Expectations of No Significant Increase in British Inflation

 

 

 

 

Decline in Gold Prices

Global gold prices fell during Monday’s trading as investors awaited comments from Federal Reserve officials and upcoming economic data.
Federal Reserve Chairman Jerome Powell and other officials are scheduled to speak this week.
The forthcoming data includes U.S. retail sales, June industrial production, and weekly jobless claims.
If retail sales are weak, it could reinforce the need to cut interest rates, which could help gold prices.
If gold surpasses $2,450, it may reach new record levels.
The U.S. Department of Labor’s Bureau of Statistics reported a 0.2% increase in the Producer Price Index
in June after remaining unchanged in May, exceeding the expected growth of 0.1% amid rising service costs.


Rise of the Japanese Yen

The Japanese yen surged against most major and minor currencies last week.
This was due to the decline in U.S. bond yields, which supported the yen gains.
The yen moved away from its 38-year low thanks to the intervention of the Japanese central bank
in the foreign exchange market to halt the excessive weakening of the local currency.
The yen topped the list of winning currencies last week, achieving its best weekly performance since late April.
New buying positions accelerated, along with the covering of short positions.
Instead of the Japanese central bank’s low liquidity and momentum strategy,
it has adopted a new approach based on solid liquidity and accelerating momentum.
The sharp drop in long-term U.S. Treasury yields supported the gains of the Japanese currency,
as more extraordinary U.S. inflation data increased the likelihood of at least two Federal Reserve rate cuts this year.

 

Expectations of No Significant Increase in British Inflation

According to Reuters, Swati Dhingra, a member of the Bank of England’s Monetary Policy Committee,
said on Monday that it is unlikely that inflation in the UK will rise significantly again due to weak demand.
She emphasized the need for the Bank of England to reduce borrowing costs.
Dhingra stated, “Now is the time to start normalizing interest rates so
that we can finally stop pressuring living standards in the way we have been trying to reduce inflation.”
She added that she does not see any kind of consumption boom,
and if we are to start moderating from the extremely high interest rates we are currently at,
it will take some time for this to happen
so that we can ease it and feed it into the real economy.
Finally, Swati Dhingra from the Bank of England emphasized that demand is too weak to allow inflation to rise sharply.

 

Rise of the Japanese Yen

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

 

Key Market Events and Analysis for the Week

Key Market Events and Analysis for the Week: This week promises significant market movements and key economic events are lined up.
Highlights include the Eurozone’s CPI, the US ADP Nonfarm Employment Change, and the UK Construction PMI.
The most anticipated data, the US Nonfarm Payrolls and Unemployment Rate, will be released on Friday.
We’ll analyze how these events might impact gold, crude oil, and major currency pairs like GBPUSD, EURUSD, and USDJPY, helping traders stay informed and prepared.

 

Content

Economic events

Gold

West Texas Crude

Dow Jones

GBPUSD

EURUSD

USDJPY

 

 

 

 

Economic events

Tuesday, July 2, 2024

12:00 PM (EUR): Consumer Price Index (YoY) (June)

Wednesday, July 3, 2024

3:15 PM (USD): ADP Nonfarm Employment Change (June)

Thursday, July 4, 2024

11:30 AM (GBP): Construction PMI (June)

Friday, July 5, 2024

3:30 PM (USD): Nonfarm Payrolls (June)

3:30 PM (USD): Unemployment Rate (June)

 

Gold

Gold rose slightly by approximately 0.3% during last week’s trading.
The markets are awaiting this week’s trading data, including the Services and Manufacturing PMI data and crucial employment data this Friday.
Technically, the price is above the support levels of 2315, forming a Harmonic pattern, which indicates a potential price increase to the 2355 levels.

 

West Texas Crude Oil

The prices of light crude oil futures stabilized above $81 per barrel,
continuing to post gains for the third consecutive week with monthly gains exceeding 5%.
According to the technical outlook, we notice stability above the pivotal level and the liquidity concentration around 78.25.
It also broke a previous major peak, enhancing the likelihood of its continuation to the 83.00 resistance.
If it consolidates above this level, it is expected to reach its main peak at around $87.65.
However, if it declines below the pivotal level, it will likely retest the support level at $72.50.

 

Dow Jones

The Dow Jones Index moved variably near the 39000 level during last week’s trading.
The markets are awaiting the Manufacturing and Services PMI data and crucial employment data,
which will be coming up this Friday.
Technically, the index rose from the support levels of 38470-38600.
If it breaks through the 39295 levels again, it is expected to reach the 39800 levels.

 

 

 

 

GBPUSD

The pound stabilized at 1.26 against the dollar and remained downward since rebounding from the 1.2860 resistance level.
Selling pressure has decreased, as indicated by the momentum indicator,
while the oscillation indicator points to a balance between buyer and seller strength.
It is likely to continue its decline to retest the 1.2505 support, which, if broken,
would signal further decline towards the 1.2300 support.
Conversely, if it closes above the last peak around 1.2710, it will likely reoccur to the resistance.

 

EURUSD

The pair rose by approximately 0.25% during last week’s trading.
The markets are awaiting the European Consumer Confidence Index and a speech by ECB President Christine Lagarde.
On the other hand, the dollar awaits the Services and Manufacturing PMI data and crucial employment data.
Technically, the pair is above the 1.0675 support levels with a Harmonic shark pattern, suggesting a potential price increase to the 1.0800 level.

 

USDJPY

The dollar stabilized near 161, its highest level in 34 years, against the Japanese yen.
It continues to hold above the resistance level, which turned into support at 160.20.
However, purchasing power is declining according to momentum indicators,
supported by the oscillation indicator in the overbought zone.
If prices remain above the support level, the upward trend will continue.
Conversely, if the support level is broken, it would signal a retest of the subsequent support levels.

 

 

Key Market Events and Analysis for the Week

Important News to be Traded This Week

Important News to be Traded This Week: As we enter the last week of June 2024,
financial markets are poised for significant movements driven by crucial economic reports and data releases.
This week’s trading calendar features high-impact events that are likely to influence major currencies, commodities, and indices.
Key highlights include the U.S. Consumer Confidence Index, New Home Sales, Gross Domestic Product,
the Federal Reserve’s Monetary Policy Committee Report, and the UK’s GDP figures.
Traders and investors closely monitor these releases to gauge the economic health and adjust their strategies accordingly.
Here’s a detailed look at the important news and market forecasts for the week ahead.

 

Content
Economic Calendar
Gold

Oil
Dow Jones

GBPUSD
EURUSD

USDJPY

 

 

 

Economic Calendar

Tuesday, June 25, 2024

USD – CB Consumer Confidence Index (June)

Wednesday, June 26, 2024

USD- New Home Sales (May)

Thursday, June 27, 2024

USD – Gross Domestic Product (Quarterly) (Q1)

Friday, June 28, 2024

USD – Core Personal Consumption Expenditures Price Index (Yearly) (May)

GBP – Gross Domestic Product (Quarterly)

USD – Federal Reserve Monetary Policy Committee Report

 

Gold

Gold dropped by approximately 0.5% during last week’s trading.
The markets are awaiting this week’s data on the Consumer Confidence Index, Gross Domestic Product, and Personal Consumption Expenditures Price Index.
Technically, the price reached the support level of 2315, which is the lower bound of the ascending price channel, suggesting an expected rise in gold to the 2355 level.

 

Oil

Light crude futures are trading above $80 per barrel. From a technical perspective,
we observe a breakout above the pivotal level and a liquidity concentration of around $78.25.
If prices remain above this level, it will likely enhance the probability of a rise to the resistance level of $82.70.
If this resistance is broken, it is expected to visit the main peak at around $87.65.
However, if it falls below the pivotal level, it will likely retest the support level at $72.50.

 

Dow Jones Industrial Average

The index rose by approximately 1.55% during last week’s trading.
The markets are awaiting this week’s data on the Consumer Confidence Index, Gross Domestic Product,
and Personal Consumption Expenditures Price Index.
Technically, the index climbed from the support levels of 38470-38600, and we expect the price to reach 39600.

 

 

 

GBPUSD

The pound fell to 1.26 against the dollar, failing to hold above the pivotal level of 1.2710,
which it traded above in mid-week sessions last week.
Increasing selling pressure indicated by the momentum index suggests a likely test of the support at 1.2585.
A break below this level may push prices down to 1.2444, followed by testing the main bottom at 1.2300.
If it rises above the pivotal level, it will likely enhance the chances of climbing to the resistance at 1.2816, then 1.2895.

 

EURUSD

The pair dropped by approximately 0.15% during last week’s trading.
The markets are awaiting this week’s data on the Consumer Confidence Index, Gross Domestic Product,
and Personal Consumption Expenditures Price Index, all from the U.S. side.
Technically, the pair reached the support level of 1.0675
with the presence of the harmonic shark pattern, suggesting an expected rise in the price to 1.0770.

 

USDJPY

The dollar rose strongly, closing above 159 against the yen.
After stabilizing above the pivotal level of 157.75 at the beginning of last week,
it approached a major resistance level of around 160.20.
If the price breaks this resistance to the upside, it will likely increase the chances of continuing the upward trend.
However, with the oscillation indicator reaching the overbought area,
there is a possibility of retesting the level of 157.75.
If this level is broken down to the downside, it may push prices towards support at 154.60.

 

Important News to be Traded This Week

 

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