Sideways movement continues – for now

Instead of dramatic fluctuations, the past days have been smooth sailing for most currency pairs and commodities. Economic data was scarce this week. Last week saw the release of US data on import prices, consumer inflation expectations and, in particular, producer prices pointing to continued inflationary pressure, only providing brief support for the US dollar.

Hopes that there could be tangible, sustainable progress towards ending the Russian war against Ukraine have not (yet) been fulfilled. The summit meetings in Alaska and Washington did not trigger any market reaction. Things could take a turn if a ceasefire or peace agreement were actually reached.

Markets focus on Jackson Hole, US labour market data

Those hoping for somewhat stronger market movements will be closely watching the Fed symposium in Jackson Hole in the coming days, where US Federal Reserve Chairman Jerome Powell and ECB President Christine Lagarde, among others, will deliver speeches.

Although it seems unlikely that they will give strong indications of monetary policy decisions in the coming weeks, nothing is certain. For the Fed, the all-important data on the US labour market will likely be published on 5 September.

Slightly rising demand for safe haven gold

The gold price has most recently traded more or less sideways, within the range established over the previous trading weeks. Last Thursday morning, the precious metal traded at 3,360 US$ per ounce and dropped to its weekly low of around 3,311 overnight Wednesday. However, prices recovered to 3,350 in the afternoon. Moderate risk aversion on the financial markets due to tech companies’ losses on the US stock exchanges drove demand for safe havens. Gold started trading today at around 3,340 US$ per ounce.

The Xetra-Gold price developed similarly, with the euro briefly exceeding the 1.17 €/US$ mark this week. Xetra-Gold dropped from 92.30 € per gram on Thursday morning to around 91.50 on Tuesday afternoon but recovered intraday to 92.35. It is expected to kick off today’s trading at around 92.15 € per gram.

Every trading range ends at some point, and so does every summer slump. There may be a few quiet days ahead in August, but by the beginning of September after Labor Day, all market participants should be back in the game and ready to hit the ground running.

I wish all readers a relaxing weekend.