Waiting for the central banks

This week had been expected to be more of a transitional week to the following one. Representatives of the central banks of the US, England, Switzerland, the ECB, and a few others will meet for the last time this year. And it is these four banks that are likely to again raise interest rates. For the Fed, a 0.5 percentage point hike is virtually set, while the others have not yet reached a definitive consensus in terms of extent. The Fed and the ECB, in particular, are also set to discuss and publish their outlook on inflation, the development of the economy and the potential monetary policy steps in 2023, with market participants watching closely.

Strong US dollar weighs on gold price

Last Friday, US labour market data had come as a surprise, turning out more robust than expected. This, in turn, supported the US dollar. US Treasury yields moved up in the short term. US yields also rose early into the week and thereby put pressure on gold prices, as did the fact that a more risk-averse mood across markets propped up the US dollar as a “safe haven” currency. Still, the gold price managed to largely recover from Monday’s 3 per cent setback.

While gold was still trading at 1,800 US$ per ounce on Friday last week and at a weekly high of around 1,810 early on Monday, it tumbled to the previous weekly low of 1,766 on Monday afternoon for the reasons mentioned above. By Wednesday afternoon, it had recovered to 1,790 and currently trades around 1,785 this (Thursday) morning at 8:00.

Xetra-Gold also down week on week

The Xetra-Gold price also came under pressure within regular trading hours this week. From 55.00 € per gram last Friday morning, it dropped to 54.10 on Monday, before recovering to 54.65 on Wednesday. This morning, Xetra-Gold was expected to kick off trading at around 54.60.

As mentioned, next week’s focus will be on the central bank meetings, which should set the course for price development until the end of the year.

I wish all readers a happy Advent weekend. For logistical reasons, I will be back on Tuesday the week after next, shortly before Christmas.