Market Update | 07/09/2023

Indications only | Closing prices are bids | Prices & Charts  : Trading View | Market Research Refinitiv | See disclaimer below

Today's Observations

Gold traded in a narrow range between $1,923 and $1,926 in Asia and Europe on Wednesday, with modest trading volume. However, activity picked up pace following the New York opening. There was a brief period of increased price volatility following mixed United States economic data. A weaker-than-expected S&P Global Purchasing Managers' Index sparked a rally to the day's high of $1,929. This was quickly followed by an Institute for Supply Management report that pointed to the strongest growth in six months, resulting in a sharp reversal in direction. The yellow metal ended the day on the lows, down 0.52% at $1,916. As of this morning, gold has held between $1,916 and $1,920. It seems likely to pivot around the 200-day Moving Average, which is set at $1,918, with a potential trading range of $1,910 to $1,930 today. Silver added another 1.57% to the previous session’s 1.88% loss, ending at $23.17. Platinum fell 2.04% to $914, and palladium ended barely lower at $1,215.

Market Commentary

September 07, 2023 (Reuters) - Gold lingered near a one-week low on Thursday following five consecutive sessions of declines, while the dollar sat atop mid-March highs after data showed the U.S. services sector unexpectedly gained steam in August. Spot gold was up 0.1% to $1,917.99 per ounce by 0120 GMT, its lowest level since Aug. 29. U.S. gold futures fell 0.1% to $1,942.20. World stock indexes fell while the benchmark U.S. Treasury yield rose, and the U.S. dollar hit its highest in six months after stronger-than-expected U.S. services sector data on Wednesday suggested inflation pressures remain. Federal Reserve Bank of Boston President Susan Collins said while there are signs of progress in cooling inflation, the central bank should proceed carefully when it comes to its next monetary policy steps. European Central Bank policymakers warned investors that a rise in borrowing costs was among the options on the table next week. The Bank of England is "much nearer" to ending its run of interest rate increases, Governor Andrew Bailey said on Wednesday. Higher U.S. interest rates raise the opportunity cost of holding gold, which does not earn any interest. Policymakers expect persistently slower growth in China, perhaps even more sluggish than current consensus estimates, seeing its transition from an infrastructure- and investment-led economy to becoming consumption-driven as "difficult". SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.36% on Wednesday. Elsewhere, spot silver eased 0.3% to $23.15 per ounce, platinum gained 0.5% to $913.24, and palladium fell 0.4% to $1,210.35. Platinum will register a 2.2% bigger supply deficit than previously expected for 2023, driven by strong demand and flat supply, the World Platinum Investment Council (WPIC) said.

Economic Analysis

The ISM Services PMI unexpectedly jumped to 54.5 in August 2023, pointing to the strongest growth in the services sector in six months, compared to 52.7 in July and forecasts of 52.5. Faster increases were seen in business activity (57.3 vs 57.1), new orders (57.5 vs 55), employment (54.7 vs 50.7) and inventories (57.7 vs 50.4). Also, supplier deliveries increased (48.5 vs 48.1). In the last six months, the average reading of 47.7 percent reflects the fastest supplier delivery performance since June 2009. At the same time, price pressures intensified in August (58.9 vs 56.8) while backlog of orders contracted (41.8 vs 52.1). "Sentiment among Business Survey Committee respondents varies by industry; however, the majority of panellists are positive about business and economic conditions”, Anthony Nieves, Chair of the ISM Services Business Survey Committee said. source: Institute for Supply Management

Gold Chart ($/oz)

Silver Chart ($/oz)

Platinum Chart ($/oz)

Palladium Chart ($/oz)

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