The financial markets are quiet ahead of the Easter holidays. People are keeping a low profile, as commodities analyst Michael Blumenroth summarises. The gold price remains stable despite turbulence on the currency and bond markets, Xetra-Gold is holding at record levels.
28. March 2024. FRANKFURT (Xetra-Gold). It has been a relaxed pre-Easter week on the financial markets so far, with many market players having clearly gone on Easter vacation. By and large, the financial markets are awaiting the publication of the inflation rate from the USA, which is the focus of the Fed's monetary policy decisions, the so-called PCE core rate, personal consumption expenditure adjusted for energy and food prices. Unfortunately, the data for this will be published on Good Friday, when the markets in New York, London and Frankfurt will be closed. As Easter also marks the end of the quarter, traders have been more cautious this week than might have been expected.
Gold despite the influence of the currency markets and government bond yields
On the currency markets, blood pressure rose somewhat, at least temporarily, as the Chinese renminbi and the Japanese yen unexpectedly depreciated significantly - the yen even fell to a 34-year low against the US dollar. This caused some uncertainty and thus increased demand for US dollars, the supposed "safe haven currency". At the same time, government bond yields rose somewhat at the beginning of the week, which should also normally have a dampening effect on the gold price.
Nonetheless, they kept an eye on the US$ 2,200 per ounce mark over the course of the week and even traded above it in the short term, although the record high of US$ 2,220 per ounce reached last Thursday has been out of reach so far this week.
Gold in US dollars virtually unchanged week-on-week
On Thursday last week, the most precious of metals was still trading at US$ 2,204 per ounce in the morning. Over the course of the day and on Friday, rising yields and a firmer US dollar caused it to fall to 2,157. In Holy Week, the yellow metal was able to recover to 2,200 - although there is no decisive fundamental reason for this, except possibly an option expiry at the end of the month - but was unable to hold this level for long. A renewed attempt to reach this significant level failed narrowly yesterday, but was successful this morning. We will start European trading today, Thursday, at around 7 a.m. at US$ 2,198 per ounce, almost at the level of the previous week.
Xetra-Gold again at record high
The Xetra-Gold price benefited from a weaker euro and was even able to gain slightly during normal trading hours until yesterday evening: From a record high of €64.80 per gram on Thursday morning last week, it initially fell to 64.15 on the same afternoon. However, it then rose sharply again from Tuesday onwards, reaching another record high of 65.20 yesterday afternoon. This morning, Xetra-Gold is likely to start the day at around €65.35 per gram, which would mean another all-time high.
In addition to the core PCE rate mentioned above, inflation data for the eurozone will also be on the agenda next week. In addition, the markets are already waiting for the US labor market data, which will be published next Friday, and a new quarter begins. Let's take a look at the fact that gold prices have held up so well this Holy Week seems somewhat impressive.
from Michael Blumenroth, 28. March 2024, © Deutsche Börse