Hello and welcome to our market week preview, where we take a look at the economic data, market news, and headlines likely to have the biggest impact on pricing and market momentum for gold, silver, and platinum, as well as key correlated assets.
Gold Market Update
The past ten sessions have seen a critical deceleration in the gold market, with spot prices for the precious metal sliding far enough last week to break below the major psychological threshold of $4000/oz before stabilizing briefly above $3990. Even with the moderate rebound as this week’s trading began during Asian business hours, we continue to see a steady decline from early October’s prices, which traded in a range near $4200.
Whereas two weeks ago we thought there might be green shoots of risk-off inflation hedging once again becoming the dominant factor for gold, it is clear from the last week that investors and managers are back to basing their gold market moves almost entirely on projections of how the US Federal Reserve will react to the threat of overheating inflation. At the start of this week, the market consensus still looks for the FOMC to hold rates steady rather than raise them, but in practical effect, that only adds weight to bets on policy interest rates being pushed to +4.00% at the December session.
Silver Market Update
Silver has endured its own aggressive decline this month. Having fallen below $54/oz from an early-October high of $60.82, the white metal has, in fact, slid much faster than gold over the same period, as evidenced by the gold-silver ratio widening as far as 74 to 1. While gold still seems to attract a (so far, minimal) degree of interest from investors not wanting to pile all of their inflation-hedging capital into the US Dollar, silver is being walloped by the combined effects of traders liquidating silver futures positions in a grab for cash and a noticeable slowdown in physical demand for silver.
US Economic Data to Watch
Wednesday, October 28 at 2pm ET // FOMC Interest Rate Decision
[No meaningful change to monetary policy is expected]
Thursday, October 29 at 8:30am ET // PCE Price Index (Sep)
[(core PCE) consensus est.: +0.3% MoM // prev.: +0.2%]
Thursday, October 29 at 8:30am ET // US GDP Growth (Q3) (Adv.)
[consensus est.: +3.2% QoQ // prev.: +2.2%]
And that’s how the precious metals basket is performing to begin the week. As always, we wish you all the best of luck in your markets in the coming days, and we’ll look forward to seeing you all back here next week for another metals market preview.
