Gold starts the new week with a rise as the ounce price exceeds 4,150 dollars
While spot gold surpassed $4,150 following weak US employment data, markets focused on the ISM services PMI, Fed minutes, and the CBRT forum in Istanbul.
Following a two-week sharp sell-off, gold started the new week with an upward trend as the ounce price climbed above 4,150 dollars. The weak US employment data released lowered expectations for a Fed rate hike in October, turning market attention to critical weekly economic data.
New Week Movement in Gold Prices
After a two-week sharp sell-off, gold began exhibiting an upward trend again in the early trades of the new week. The ounce price gained around 0.4 percent on the morning of October 5 to reach the 4,158 dollar level. The main driver behind this movement was the shift in US interest rate expectations.
Weak US Employment Data and Rate Expectations
The new rate hike scenario that pressured gold last week weakened significantly following the weak employment figures announced on Friday. Nonfarm payrolls in the US increased by only 29 thousand people in September, while the unemployment rate rose to 4.2 percent.
Change in Fed October Pricing
In market pricing, the probability of the Fed making a new rate hike at its October 27-28 meeting dropped from around 64 percent to roughly 22 percent. While this eased one of the most significant short-term pressures on gold, expectations regarding December were observed to remain strong.
Dollar and Bond Pressure Persists
While the US dollar maintains its strong course, long-term bond yields are also at levels last seen in recent years. For gold, which offers no interest yield, high bond yields increase the alternative cost, keeping a cautious atmosphere alive in the market.
Critical Developments Focused by Markets
There are three main developments that will influence the direction of gold prices in the new week. These include the US ISM services sector PMI data, Fed meeting minutes, and the CBRT Economy Forum in Istanbul.
Turkey Markets and Gram Gold Outlook
The most striking development of the week for Turkey will be the speech by Fed Governor Christopher Waller at the CBRT Economy Forum in Istanbul. The recovery in ounce gold supports gram gold, while the course of the exchange rate continues to exert its effect.