At the end of the week, gold is up after the NFP report, which turned out to be weaker, although the change in farm sector employment exceeded expectations. It’s worth noting the strong revision down of the previous month’s result along with an unemployment rate increase above forecasts. The Fed will also be taking falling wages into consideration.
This recent significant gold price increase is likely a result of speculative investors increasing their long positions. This will be confirmed by the latest data, which will be published next Tuesday by the CFTC. In the ETF market, which replicates physical gold, there has been a dominant capital outflow lately, and so far, there is no improvement. If this market is reactivated again, it could be an additional growth impulse for gold in the coming months.
The upcoming week mainly boils down to one key publication, which will be the US inflation data released on Tuesday. PPI data will not electrify the market as much but could cause some increased volatility. The strength of the American consumer will also be evaluated through the retail sales report. From domestic data, we will receive the CPI indicator (Friday) and the latest NBP inflation report (Monday).
Łukasz Zembik Oanda TMS Brokers
