Sunday, November 28

Gold starts the week bullish as dollar index weakens

The yellow metal started the week bullish in the Asian trading session, hitting a two-month high.

A major catalyst for this bullish momentum is the decline in the dollar index also seen in the Asian session. Gold futures is currently bullish by 0.23%, currently trading at $1,820.95 an ounce.

The yellow metal has proven resilient to remain above the $1,800-mark after hitting its highest level since September 7th, 2021, earlier in the session. The dollar, which usually moves inversely to gold, is down 0.04% to currently trade 94.278 basis points.

What you should know

Investors reacted to Friday’s Non-Farm Payroll (NFP) job report which revealed that the U.S. added 531,000 non-farm jobs to the economy in October, stronger than the +455,000 that was forecasted. The unemployment rate also declined to currently stand at 4.6% in October.

Esther George of the U.S Federal Reserve Bank of Kansas City said on Friday that “There is no question” that the U.S. labour market is tight. Esther George will also be looking carefully at how wage pressures and inflation expectations unfold as she tries to gauge how close the economy is to the Fed’s goal of full employment.

On the same day, the U.S. Congress passed a $1 trillion infrastructure bill to repair the nation’s airports, roads, and bridges.

In Asia Pacific, Chinese trade data released on Sunday showed that exports grew 27.1% year-on-year in October. Imports grew 20.6% year-on-year and the trade balance stood at $84.54 billion.

Meanwhile, the Bank of Japan said today in a summary of opinions from its October meeting that it sees the need for ultra-easy monetary policy as inflation is rising only modestly and wage growth remains feeble.

Last week, the Bank of England (BOE) kept its interest rate steady at 0.10%. The move came as a surprise to investors, who had bet that BOE would be one of the first key central banks to hike interest rates since the outbreak of COVID-19.

The United States Federal Reserve (FED) said last week that it would begin asset tapering but remain “patient” on interest rate hikes as it handed down its decision. It also held onto its view that inflationary pressures would be temporary.

How other precious metals are trading

Other precious metals are also bullish for the start of the week. Silver is up 0.81%, currently trading at $24.35 an ounce. Platinum is up 0.75%, currently trading at $1,044.70 an ounce. Palladium is up 0.53%, currently trading at $2,050.50 an ounce.

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