As tomorrow’s Corpus Christi is a bank holiday in various German federal states, among them Hesse, my report comes a day early. To any feelings of envy: allow me to say that this will be the last public holiday of the year here in Hesse until Christmas which doesn’t fall on a weekend. Let us therefore relax tomorrow, just as gold prices have done in recent days.
Gold prices recover slightly but remain below key levels
The precious metal did manage to recover somewhat from last week’s lows, though it failed to decisively break above the mark of 4,600 US$ per ounce at the end of last week. It was supported by a further decline in oil prices, particularly last Friday, when Brent crude briefly dropped below the 90 US$ per barrel mark on the futures markets. With progress on the opening of the Strait of Hormuz to shipping from the Middle East still lacking, oil climbed back to around 97 US$ per barrel by this morning. And gold prices remain true to their pattern: Rising oil prices cause gold to depreciate, and vice versa, which is due to inflation and rising or weakening interest rate hike expectations, in tandem with oil prices.
Stock rally and AI boom weigh on gold demand
The S&P 500 stock index closed at a record high for the ninth consecutive day yesterday and investment capital is currently shifting back into the AI sector. This may continue to divert the focus from gold – after all, every euro or US dollar can only be invested once. Overall, circumstances were therefore not conducive to a sustained upward trend for gold.
Sideways movement in gold prices continues
While gold traded at around 4,380 US$ per ounce last Thursday morning, it strengthened to 4,595 by Friday afternoon due to falling oil prices, closing the week at 4,540. The precious metal has since been trading sideways between 4,450 and 4,550 US$ per ounce. As of Wednesday morning, it was trading at the lower end of this range at around 4,460 US$ per ounce due to oil picking up speed this morning.
Similar price development for Xetra-Gold
The Xetra-Gold price also rose sharply from 121.25 € per gram last Thursday morning to 126.50 on Friday afternoon. In a development echoing that of gold in US-dollars, Xetra-Gold ran out of steam and has been trending moderately downward since the start of the week. It was expected to start trading this morning at around 123.50 € per gram.
Focus on geopolitical situation and upcoming central bank meetings
The situation in the Middle East remains the most pressing topic across markets for the time being. On Friday, the US jobs report might cause some market movement, before the spotlight shifts heavily to the numerous central bank meetings and thus monetary policy over the next two weeks.
I wish all readers a happy holiday or a relaxing weekend.