Happy Friday, merchants. Welcome to our weekly market summary, where we take a look back at these last five trading days focusing on the market news, economic data and headlines that had the biggest impact on the prices of gold and other key correlated assets, and that may continue to do so in the future.
Here’s what you need to know:
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Tight holiday liquidity and widespread sell-off pressure pushed gold to a weekly low near $4,860 before buyers pulled back and rebuilt their positions.
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The Fed meeting minutes reinforced a divided committee, keeping rate cut expectations in play and helping gold remain well supported around the $5,000 level.
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Rising geopolitical risk helped trigger a risk-off bid late in the week, pushing gold back above $5,000 and closer to a potential close of ~$5,100.
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Weak fourth-quarter GDP and a Supreme Court ruling against Trump’s tariff strategy could shift next week’s focus toward the Fed’s speech and White House messaging.
It hasn’t been that long, on a reasonable scale, as a stretch of trading like the last 4 or 5 days would be considered wild for the gold market, with spot prices moving in a wider range than $150 an ounce.
However, in the context of the last 18 months, this week has been relatively quiet, although it appears to have been another stretch of healthy consolidation at a very high price.
Trading volumes were noticeably lower on Monday due to the US President’s Day holiday, which left most US trading desks with light coverage and minimal activity.
While the number of trades made that day was well below normal, the clear consensus was that some of the sell-off trend we saw last week would resume. The downward pressure, which would have otherwise been considered negligible, had a huge impact on the yellow metal, with spot prices falling throughout Monday to a weekly low near $4,860 an ounce.
However, gold did not stay at the bottom for long, as the return of US desks to the market attracted a wave of investors and managers still eager to reopen or increase positions at the start of the week.
Whether due to the view that the week’s upcoming macroeconomic data would strengthen the case for the FOMC to resume cutting interest rates sooner, or a more fundamental hedge against geopolitical and trade instability around the world (as we will see, both turned out to be appropriate decisions), Tuesday’s trading resulted in a sharp rally in spot gold prices that once again moved just above $5,000 and would only correct modestly below over the next two sessions.