One man's joy is another man's sorrow

Market report Michael Blumenroth – 18.04.2019

Weekly market report

We look back at an almost disturbingly uneventful trading week. Major currencies, in particular the euro against the US dollar and the yen, saw hardly any movement.

The situation on the stock markets has been somewhat different, with prices continuing to rise. The DAX was up seven days in a row until yesterday evening, and US benchmark indices remain close to their all-time highs. Another sign of regained risk appetite is the rise in yields on government bonds. Safe harbours seem to have lost some of their appeal, which in turn also affects gold, the Swiss franc, the yen and government bonds. In addition, rising market interest rates/yields have a detrimental effect on the price of gold.

Losses for gold in US dollars and euros

The highlight of the week to date has been the economic data from China, which points to stronger growth than analysts had expected. This has also put some pressure on gold as a safe haven, although platinum, palladium and copper saw slight gains.

Gold traded at 1,293.50 $/ounce on Friday morning last week and climbed briefly to a weekly high of $1,295.50 $/ounce. It started a gradual retreat on Friday afternoon and saw increased selling pressure, especially on Tuesday. Last night, the week’s low (and the annual low, thus far, for 2019) was reached at around 1,271 $/ounce. The precious metal currently trades marginally higher, at 1,272 $/ounce.

Since last Friday, the euro has moved within a narrow range, between 1.1250 and 1.1324 €/US$, remaining just above or below the 1.13 mark throughout.

Slight loss for Xetra-Gold in the course of the week

The Euro/US dollar exchange rate had a limited effect on the Xetra-Gold price. From 36.90 €/gram last Friday morning, it continuously slid, especially on Tuesday, downward to the week’s low of 36.20 €/gram and currently trades at approx. 36.20 €/gram.

The markets are now waiting for the publication of further economic data, i.e. today’s Purchasing Managers Indices for the euro zone as valid leading indicators. The stock markets are focusing on the reporting season.

I wish all readers a beautiful and sunny Easter weekend.

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