Gold and other commodities were able to ride the reflation trade very high last week, resulting in prices trading well above $ 1800 per troy ounce per 10 week high. Our frequent crunch in the market seems to be revisiting an unprecedented week in terms of market news and major results, ahead of the April Jobs Report, which has highlighted historical disappointment for investors. Fruits have been carrying a little heavier since the last few weeks, with 10 US years being held at less than 1.6 percent all week.
After months of lazy trading, gold prices exploded. Following the 9,16,000 job creation announced in March (revised to 7,70,000 in this report), many were expecting another blockbuster NFP last month, expanding the aviation industry theme, inflation, and the need for Federal Reserve tapering. of the simple money that had pushed the markets through the epidemic. Each piece of jigsaw had its own way of trading, and the April NFP broke them all, forcing retailers to reconsider what would happen in the coming months if the effect of COVID-19 on the jobs was more significant and stubborn than previously thought.
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Following the outbreak of COVID last year, the Federal Reserve held interest rates of between 0% and 0.25%, with Governor Jerome Powell proposing that recent price pressures be a temporary development that will be eradicated over time. Since the beginning of the year, market participants have sought to put pressure on the Fed to speed up their bond-buying program and raise interest rates slightly. But there is one thing that stands out from non-farm payables and unemployment data: the Fed’s long-term monetary policy can be extended for a while, which is why it supports a precious metal package.
With economic data, Fed and U.S. officials note, it is also important to look at rising cases and stricter laws and regulations that are being re-established in many countries especially in rural areas. These limitations not only increase fear in the market but also influence the perception of a visible market. Compared to last year we certainly do not have a complete lock, although there are strict limits and shops are closed in a few provinces. We’ve seen a big change in import numbers from last year to this year. And as Akshaya tritiya approaches later this week, demand could either be physical or ETFs or other platforms expected to grow, supporting the general idea.
Gold investments confirmed the entry of the week ended May 9, 2021 and currently securities stand at about 1,019 tons compared to the capture of 1,017 tons last week. On the other hand, ishares Holdings has seen the emergence of about 22 tons and is currently holding about 17,627 tons.
This week, the economic calendar has important viewers that can create market uncertainty. In terms of data, inflation data, retail sales and industrial production numbers are expected from the larger economy, which will continue to reflect the economic viability of the economy. In the wake of last week’s economic data, a few Fed officials are scheduled to speak this week, which will be an interesting impression for investors.
There are expectations that US-China will meet soon in relation to their First Phase agreement, which is why any renewal related to this will be worth looking into. Also, the volatility of the US and US yields cannot be ignored. It is advisable to maintain a vigilant approach, expecting gold to trade on the other side with good bias in the next few weeks.
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