Last Friday, gold closed at $1,088.10/ounce, up 0.83% compared wiht the opening price $1,079.07/ounce. The range widened between $1,076.09 – $1,097.25/ounce upon mixed U.S. economic data and gloomy global stock market.
U.S. economic data
Retail Sales and Industrial Production failed to meet the expectations. Core Retail Sales went down 0.1% in December, compared with the speculation of surging 0.1%; Industrial Production also fell 0.4%. Moreover, GDP growth was reported to be slowdown. According to a survey conducted by University of Michigan, inflation expectation reached a low at 2.4%, the lowest since January 2015. Dim economic outlook held the dollar down back to the earth.
Fed rate hike depends much on the health of the economy and inflation. When expectation is low, Fed might consider a slower pace in the tightening path, make room for inflation to recover on stable energy price and the green. Therefore, the gold price can be supported by this gradual pace and be raised in the portfolio.
Concerning stock market
After being free from sanction. Iran declared to produce 500,000 bpd more, causing the oil price and energy shares in U.S. market to plunged deeply. The Wall Street lost 2% due to lower oil. In that time, gold is considered to be a safe haven, demand for gold may help the price surg up.
Dollar Index lost 0.23% to 98.99, Fed prospect for a rate hike is decreasing; therefore, gold may come in the spotlight and go up.
Analysis of Group If24h