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Gold settles higher, but records weekly loss

Monday, June 26, 2023

Today’s headlines

What’s happening: Gold prices moved higher on Friday after recording losses for three sessions.

What happened: The safe-haven asset settled higher, despite strength in the US dollar.

However, gold recorded its biggest weekly decline since February following interest rate hikes from several central banks.

Why it matters: Gold prices remained under pressure for most of the week following a flurry of rate hikes from central banks around the world. Central banks in the UK, Turkey, Switzerland, and Norway hiked rates last week, while the US Federal Reserve signalled two further rate hikes later this year.

However, the yellow metal was able to find some support on the last trading session of the week, despite strength in the greenback. The US dollar index, which measures the currency’s performance versus a basket of major peers, gained 0.47% to 102.87 on Friday. Gold and US dollar generally have a negative correlation, as strength in the greenback makes metals more expensive for foreign currency holders.

Traders assessed US economic data released on Friday, which showed the S&P Global services PMI declining to 54.1 in June, from 54.9 in the previous month and. The S&P Global manufacturing PMI for the US also fell to 46.3 in June, from 48.4 a month ago.

Both gold and silver prices closed the week lower after declining to around three-month lows on Thursday.

Gold futures for August delivery climbed $5.90, or 0.3%, to close at $1,929.60 per ounce, with prices for the yellow metal recording a 2.1% weekly loss. Silver futures for July delivery declined by 0.5% to settle at $22.35 per ounce, with prices falling 7.3% for the week.

What to watch: Traders will watch comments from several central bank officials regarding their monetary policies, which could provide further direction to the gold markets. Markets will also monitor inflation rate reports from around the world.

The markets today

The Canadian dollar will be in focus today ahead of a couple of economic reports

Context: The CAD/USD forex pair moved lower on Friday amid a decline in crude oil prices.

Details: Prices for the Canadian currency came under pressure on Friday following weakness in price for crude oil, one of Canada’s major exports.

WTI crude oil for August delivery fell 35 cents to close at $69.16 per barrel on Friday, while Brent crude for August delivery declined 29 cents to $73.85 per barrel.

Strength in the US dollar index also exerted some pressure on the CAD/USD forex pair on the last trading session of the week.

Traders assessed recent economic releases from Canada, which showed retail sales in the country growing by 0.5% in May. Considering April, Canada’s retail sales rose by 1.1%, topping preliminary estimates of 0.2%.

The CAD/USD forex pair fell 0.51% to 69.51 on Friday. The S&P/TSX Composite index declined by 0.83% to settle at three-month low of 19,418.23, recording losses for the sixth straight session.

What are expectations: Traders await data on manufacturing sales and wholesale sales from Canada today. Manufacturing sales in Canada, which rose by 0.3% in April, are expected to grow by 0.1% in May. Analysts expect wholesale sales in the country to rise 0.5% in May following a 1.4% decline in the previous month.

Canada’s inflation rate data, due to be released on Tuesday, will also remain in focus. The annual inflation rate in Canada is likely to ease to 3.6% in May, from 4.4% in April.

Other Markets: US trading indices closed lower on Friday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 0.65%, 0.77% and 1%, respectively.

The news shaping the markets

US President Joe Biden and Canada’s Prime Minister Justin Trudeau discussed Russia’s security situation following a short-lived mutiny by Wagner group’s fighters. The RUB/USD remained broadly flat in forex trading this morning.


Argentina’s retail sales jumped 147.8% year-over-year in April, following 126.2% growth in the earlier month, which lent support to the ARS/USD forex pair.


Mauritius’ industrial production rose by just 0.2% year-over-year in the first quarter, versus a 9.2% surge in the prior three-month period, sending the MUR/USD pair lower in forex trading this morning.


Macau’s annual inflation rate accelerated to a seven-month high of 0.9% in May, from 0.85% in the prior month, exerting pressure on the MOP/USD forex pair.


Netherlands posted a current account surplus of €25.9 billion in the first quarter, versus a year-ago surplus of €27.4 billion, which sent the EUR/USD pair higher in forex trading this morning.

What else to watch today

Spain’s Producer prices, Germany’s Ifo Business Climate indicator, Ifo Current Conditions indicator, Ifo Expectations indicator, UK’s CBI Distributive Trades, Brazil FGV Consumer Confidence, Foreign direct investment, current account and central bank of Brazil focus market readout, Mexico Economic Activity, as well as US Dallas Fed Manufacturing Index.


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