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Gold prices (XAUUSD:CUR) were trading close their session’s high on Monday in a data-busy week, after logging their worst week this year, as markets focus on the Federal Reserve’s interest rate decision.
Gold ended last week 2.3% lower, its first weekly loss in six, marking its worst week since early December, after a major escalation in the Middle East crisis was avoided.
Investors are scaling back expectations that the central bank can reduce rates in coming months, following a hot U.S. inflation report.
On the day of the Fed’s rate decision, the U.S. ISM manufacturing data is expected to show the sector remained in expansion in April. The monthly jobs report follows on Friday, which will help investors gauge the labour market’s health.
“Gold bulls bought into last week’s weakness, protecting an elevated long-established at much lower levels,” Ole Hansen, Head of Commodity Strategy at Saxo Bank said.
Two failed attempts to gain a foothold above $2,400 in the prior week drove an overdue correction in gold, but the near 3% correction in fact triggered a small amount of net buying, not selling, and it highlights the strength of the rally with the bulk of the length having been bought in early March below $2,200, Hansen added.
On the geopolitical front, the U.S. pushed to broker a peace deal between Israel and Hamas that would reduce tensions in the Middle East, which also drove oil prices lower.
Brent crude futures (CO1:COM) dipped below $89 a barrel, while West Texas Intermediate (CL1:COM) dropped below $84.
Elsewhere, a heavily shorted grains sector saw the strongest week of net buying since last July.
In the week to April 23, the Bloomberg Commodity Total Return index traded near flat for a second week with strong gains in industrial metals, livestock, and grains offsetting losses in energy, precious metals and softs, Saxo Bank’s Hansen highlighted in his latest commentary.
Gainers among the 26 futures market tracked, were natural gas, copper, wheat, cocoa and hogs, while sellers focused on fuel products, gold, silver, platinum and coffee, as per the report.
Recent Commodity Price Movements and A look At Some ETFs
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Energy
Metals
Agriculture
Commodity ETFs
Gold ETFs:
Other Metal ETFs:
Oil ETFs:
Agriculture ETFs:
