Weekly market report by gold market expert Michael Blumenroth

Market report 14.04.2016

Stock market uptrend and strong US dollar slow down gold only for a short time


As already mentioned last week, we are publishing week’s market commentary a day early as I will be busy all day at tomorrow’s Invest fair.

Investors in gold thus far look back at a week that was divided into two parts. Until Tuesday afternoon, things seemed fine. A weakening US dollar and uncertainty on the stock markets helped the gold price yield its highest level in four weeks. Traded at a mere 1,233 US$/ounce last Friday, the price of gold climbed to 1,262.50 US$/ounce. Chinese trade balance data published on Wednesday night was above expectations, which sparked risk readiness across the markets, resulting in a stock market uptrend. As a result of the rising stock markets, however, investors deemed safe havens less necessary. Additionally, the US dollar rose yesterday against the G10 currencies such as the Euro, Yen, Swiss franc and British pound. A stronger US dollar also increases the price of gold traded in US dollar, usually causing a slump in gold prices. 
This was also the case during the reporting week. From 1,262 US$/ounce, the precious metal fell to 1,230 US$/ounce last night. While I am writing this report, it has somewhat rebounded to 1,242 US$/ounce – still nearly 10 US dollars above last Friday’s level.

The depreciating Euro price against the US dollar additionally benefits investors in gold against Euro. During the course of the week, Xetra-Gold has climbed from 34.90 €/gram to 35.60 €/gram and currently trades at 35.50 €/gram.

Tomorrow, the markets will be discussing the Chinese GDP and industrial production data to be published tonight. On Sunday, the oil producing countries’ meeting in Doha is on the agenda, which will see a discussion on freezing oil production. Depending on the outcome, Monday could see strong movements in a number of markets. We’ll see.

I wish you all a relaxing weekend. 

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