GOLDEN MARKET COMMENTARY ANALYSIS - WEEK 36 - 2023 [04/9-08/9]
This week, the international gold price has increased continuously from 1,912 USD/oz to 1,952 USD/oz and closed at 1,939 USD/oz.
The reason why gold prices rose sharply this week was because the US labor market continued to show less positive signals. Specifically, although the number of non-farm employment (NFP) in August reached 187,000 jobs, higher than the expected level of 170,000 jobs, compared to the first months of 2023, there was a strong downward trend.
Notably, the US unemployment rate in August also jumped to 3.8% compared to 3.5% in July.
A sharp increase in unemployment, a decrease in wages... will cause consumer spending - the main growth engine of the US economy to decline. This will certainly force the Fed to consider stopping raising interest rates, even moving towards cutting rates in 2024.
Faced with the above scenario, although the short-term gold price may continue to correct and accumulate, in the long-term, the gold price will reverse and recover again if the FED signals to start cutting interest rates.
With very little economic data scheduled for release next week (services PMI, weekly jobless figures), investors should keep an eye on the dollar and US Treasury yields. to identify gold price trends and decide appropriate investment strategies.
Ginny Nguyễn
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