Yesterday an ounce of gold rose from $ 1,760 to almost $ 1,770. At the same time, the yield on 10-year US Treasury bonds rose slightly – from 1.47% to 1.48%, and the euro rate increased from $ 1.160 to $ 1.162 (which is a positive factor for the market gold). In the US, there was data that the volume of industrial orders in August rose by 1.2%, i.e., slightly more than the consensus forecast (1.0%).
The revised estimate of this indicator for July indicates that it increased by 0.7% (previously, the growth rate at 0.4%). Thus, these publications could have become a reason for optimism regarding the prospects for the American economy’s recovery—the formation of a positive mood by the general uncertainty and high anxiety among market participants.
This news background provided preconditions for the rise in gold prices.
At the same time, the Bloomberg Commodity Spot Index, which takes into account the quotes of futures for 23 types of energy, metals, and agricultural products, reached an all-time high on Monday;
to a large extent, this increases the fears associated with the prospect of stagflation, price increases with the stagnation of household income.
The situation around the US national debt remains somewhat uncertain. President Joe Biden argues that the debt ceiling could be reached in two weeks and accuses Republican senators of being unwilling to compromise. The stock market correction triggered by Facebook disruptions and the subsequent wave of sales in the high-tech sector contributed to the increase in nervousness yesterday. The fall in major stock indices provided a positive news background for the gold market.
Meanwhile, in China, there are additional (in addition to the situation around the Evergrande Group) reasons to fear problems in the development industry: another local developer – Fantasia Holdings Group – did not fulfill its obligations to bondholders time. In the Asian session on Tuesday, gold fell to $ 1,750 an ounce. Despite the positive factors that ensured yesterday’s growth, the gold market remains under pressure, as its participants expect the Fed to start rolling back quantitative easing.
Today IHS Markit will publish PMI indices for the services sector for several developed countries. In the US, ISM will present a similar index for September. Also, due out the August Eurozone PPI and the US trade balance report for August. In our opinion, today’s gold prices will test the strength of the support level of $ 1,745 per ounce.
