Consolidation phase

Market report Michael Blumenroth – 20.06.2024

Weekly Market Report

Overall, this week’s price fluctuations have been limited. With depreciation pressure on the euro remaining high last Friday, eurozone stock indices dipped southwards while government bond yields for some European countries moved firmly upwards. The markets have been in much calmer waters this week.
Perhaps it’s the European Football Championship that has slightly sedative effect on market players – after all, many of them want to get to the stadium or TV in time. More likely, it is yesterday’s US bank holiday that caused idleness on the part of market participants. They are expected to up their activity next week, with half-year end dispositions likely.

Increasing risk appetite

Traders’ and analysts’ overriding concern continues to be the question of which central bank will lower key interest rates, when and how often. At present, the interest rate futures markets continue to assume that the Fed could cut interest rates twice this year, partly due to weaker than expected data on US retail sales in May – although some Fed representatives did express scepticism this week. Nevertheless, the week has so far been characterised by a slight uptick in risk appetite, resulting in more robust equity markets and a weaker US dollar.

Gold prices above previous week’s levels

Last Thursday, gold traded at 2,311 US$ per ounce, slipping to 2,296 on the same day but recovering by the evening to above 2,300. On Friday, it peaked at 2,336.50 and has since been moving sideways within a well-defined trading range between 2,310 and 2,335 US$ per ounce until yesterday evening. This morning at around 7:00, the precious metal started trading in Europe at 2,341 US$ per ounce, slightly above that range.

Xetra-Gold also depreciated, from 68.80 € per gram last Thursday morning to 68.70 on the same day and recovering to 70.30 on Friday, which marked the week’s high. It has since remained within a well-defined range between 69.20 and 69.90 € per gram. Xetra-Gold is expected to start today’s trading slightly firmer at around 70.05.  

Various central bank meetings are scheduled in Europe today, including in Zurich, London and Oslo. Tomorrow, leading indicators for June, i.e. the purchasing managers’ indices, will be published in the eurozone, which might cause market movement.

I wish all our readers a relaxing weekend.

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