Weekly Market Report | 02/07/2023

Gold breaches $1900 but recovers to unchanged on the week, looks technically positive

Indications only | Closing prices are bids | Prices & Charts  : Trading View | Market Research Refinitiv | See disclaimer below

Summary

Gold posted its low for the day of $1922 at the opening bell on Monday with the price rising to $1928 on physical buying but gave up the early gains by the European opening. It then staged a significant rally to reach a high for the week of $1933 following a strong morning benchmark in London that suggested further Central Bank buying. The yellow metal fell back in New York on modest volume to end with a marginal 0.16% gain at $1923 after a stronger than expected United States manufacturing report. However, silver gained 1.88% to $22.79, platinum 0.65% to $928 and palladium 2.04% to $1302.

Gold rose to $1930 in Asia on Tuesday, then eased to $1920 in Europe before revisiting the highs in early New York trading ahead of the release of a raft of important United States economic reports. Stronger than expected Durable Goods Orders and New Home Sales combined to suggest further rate hikes and sparked a sell-off in gold to $1912 amid reasonable trading volume. The yellow metal ended down 0.47% at $1914, silver added 0.31% to $22.86, platinum ended marginally lower at $927, and palladium fell 0.84% to $1291.

Gold traded narrowly in Asia on Wednesday between $1917 and $1913 but fell in Europe to $1904 as the United States Dollar rallied after Jerome Powell struck a hawkish note in his speech at the European Central Bank’s Central Bank forum, suggesting that further rate hikes were required this year to bring United States inflation under control. Physical bargain hunting and profit taking helped gold recover to $1913 before dipping back into the close to end down 0.37% at $1907, silver fell 0.7% to $22.70, platinum 1.29% to $915, and palladium 2.71% to $1256 after posting a 4 ½ year low of $1206.

Gold eased from $1912 to $1903 in early Asian trading on Thursday but reversed this move in Europe to set up a volatile session in New York ahead of a raft of key United States economic reports, headlined by the latest Gross Domestic Product data. United States growth in Quarter 1 came in stronger than expected and combined with a sharp decline in weekly jobless claims to underline the strength of the United States economy and increase the pressure on the Federal Reserve to resume its’ rate hike program in July. This sparked a rally in the United States Dollar and United States Treasury yields, and a corresponding decline in gold, with the price breaking below the pivotal $1900 level to reach a 14-week low of $1894. However, the weakness was short lived as good buying emerged to propel the yellow metal back into plus territory for the day and ended marginally higher at $1908. Silver finished with a pared 0.57% loss at $22.57, while platinum fell 1.75% to $899, its’ lowest close since last October, and palladium declined 2.79% to $1221.

Gold held narrowly between $1905 and $1910 in Asia on Friday but dipped to $1901 in Europe; however, soft personal spending and Personal Consumption Expenditures inflation data released shortly after the New York opening sparked a technical rally that extended to $1922 before the yellow metal ended ‘on the up’ at $1920, representing a gain of 0.63% on the day and unchanged for the week.

Silver added 0.89% to $22.77 and was up 1.79% for the week; platinum gained 0.67% to $905 but was down 1.63% for the week; palladium ended barely higher at $1222 but fell 4.23% over the week.

Looking ahead, we can expect a quiet start on to the week with the Commodity Exchange, Inc. (COMEX) closed on for Independence Day until Wednesday, but we then expect further price volatility with the publication of the Federal Open Market Committee minutes, followed by the latest United States employment data on Friday. After briefly breaching the pivotal $1900 level, the recovery to unchanged on the week was technically encouraging and could generate a sustained rally towards the 100-day moving average pegged at $1944, with potential to reach the 50-day moving average at $1969. Silver’s positive close above the 200-day moving average sets up a rally towards the 100- day moving average pegged at $23.34, with the 50-day moving average located at just below $24 coming into play. The platinum group metals should rally with platinum the best bet.

Gold Chart ($/oz)

Silver Chart ($/oz)

Platinum Chart ($/oz)

Palladium Chart ($/oz)

This document is issued by Value Trading BV. While all reasonable care has been taken in preparing this document; no responsibility or liability is accepted for errors of fact or for any opinion expressed herein. Opinions, projections and estimates are subject to change without notice. This document is for information purposes only and for private circulation. It does not constitute any offer, recommendation or solicitation to any person to enter into transaction or adopt any hedging, trading or investment strategy, nor does it constitute any prediction of likely future movements in rates or prices or any representation that any such future movements will not exceed those shown in any illustration.