Gold is bullish today as the U.S markets start the week. A weaker U.S dollar coupled with global inflation concerns has given the yellow metal the boost to break past the $1,800 trading range.
What you should know
- Gold so far has been struggling this year to gain momentum. The yellow metal is down 6.85% at the current market price of $1,809, as of the time of writing this report.
- The yellow metal seems to be gaining momentum as Central banks from Serbia to Thailand have been adding to gold holdings. Also in Ghana, the country recently announced plans for purchases, as the worry of accelerating inflation looms and a recovery in global trade provides the firepower to make purchases.
- On the data front, Japan’s household spending grew 11.6% year-on-year in May, which was higher than the 10.9% growth in forecasts prepared by Investing.com but lower than April’s 13% growth. It contracted by 2.1% month-on-month.
- In Europe, the Markit composite purchasing managers’ index (PMI) for June was 59.5, while the services PMI was 58.3. Both PMIs were higher than expected, with businesses in the area expanding at the fastest pace in 15 years.
- Global shares remained close to record highs on Monday, boosted both by the European data and the latest U.S. jobs report released on Friday. However, concerns about the Delta variant of COVID-19 remain.
What to expect
Investors are now focused on the minutes from the Fed’s June meeting to be released tomorrow for indications on how the U.S Feds plans to tackle inflation. The U.S. Institute of Supply Management (ISM) non-manufacturing PMI for June is also expected to be released later in the day.
In other countries, the Reserve Bank of Australia’s policy decision is due to be released later in the day. Meanwhile, the Postal Savings Bank of China suspended new openings for accounts to trade in the spot precious metals market due to price fluctuations and elevated trading risks.
Gold futures is up 1.45%, currently trading at $1,809 after hitting its highest since June 18 at $1,794.86 on Friday. The dollar index, which usually moves inversely to gold, is marginally negative by 0.01% after hitting a three-month high at the end of the previous week to trade at 92.45 basis points.
As for other precious metals; silver is up 0.66%, trading at $26.69, palladium is up 2.92%, trading at $2,874.20 and platinum is up 1.66%, trading at $1,105.80.
