Gold Under Pressure at Beginning of Week
Gold has received losses on Monday, continuing the downward trend we saw earlier week. In the European session, the spot price sets at $1211.19. In the US session, there are no significant events to start off the week; however the markets will be looking at manufacturing numbers, with the release of the Empire State Manufacturing Index and Industrial Production. Both indicators are probable to progress, which could enhance the US dollar.
The US finished the week with different news, as inflation dipped as consumer confidence bounded. The Producer Price Index, the primary gauge of manufacturing inflation, dropped by 0.2%, its worst showing in six months. The estimate stood at -0.1%. Meanwhile, UoM Consumer Sentiment moved higher for a fourth straight month, positioning to increased optimism among US consumers. The major indicator climbed to 93.8 points, its highest point since January 2007 and well above the estimate of 89.6 points.
On Friday, there was fine news from retail sales and unemployed claims. Core Retail Sales came in at 0.5%, ahead of the approximate of 0.1%. Not to be undone, Retail Sales posted a gain of 0.7%, whipping the approximate of 0.4%. This was the indicator’s strongest showing in 12 months. There was more excellent news on the employment, as Unemployment Claims dipped to 294 thousand, below the estimate of 299 thousand.
The euro showed minor reaction to the ECB’s second TLTRO on Thursday. This lending program targets to boost the market by increasing bank lending to the actual economy. The public sale saw European banks take loans of about EUR 130 billion. While this was higher than the September sale, which had a assume of EUR 82 billion, the sum of around 212 billion was only half of the ECB target of 400 billion.
The unsatisfactory figure means that the ECB continues under strong pressure to introduce QE early in 2015, which would probable push the euro to further lows. Meanwhile, the Eurozone continues to fight with low inflation levels, with a senior ECB authorized warning of deflation risks. While giving a statement in Washington on Tuesday, ECB board member Peter Praet said that falling oil prices might drive Eurozone inflation into negative region.