GOLD PRICE

The gold market is slightly lower in early trade on Wednesday as investors digest last night’s State of the Union address by President Trump. Stocks are also moving lower today while the dollar index is stronger.

The ISM Non-Manufacturing Index failed to reach its expected target today, posting a drop from 58.0 in December to 56.7 in January vs 57.2 expected by most analysts, although others such as Goldman Sachs has predicted a sharp drop.

The President of the Cleveland Federal Reserve Loretta Mester said on Monday that the US central bank’s policy of raising interest rates may not be suitable long-term.

The gold market is moving slightly higher in early action Tuesday following a late-Monday meeting between President Trump and Fed Chairman Jerome Powell. The meeting could potentially have major implications for gold and other markets as the Fed attempts to steer monetary policy in the months ahead.

Unfortunately for those of you after a little but of excitement, this week’s economic calendar won’t have it. After getting the blood flowing again last week, things remain a bit slow this time around as the federal government continues catching up on its data collection and reporting after the prolonged shutdown

Traders and investors can stay up-to-date on current market supply/demand metrics by looking at recent bullion sales data. The U.S. Mint is one of the largest and most highly respected mints anywhere in the world, and it regularly publishes sales data on its products.

Having set a foothold above the major psychological price-line of $1300 to end last week, several different factors have collaborated over the last few days to drive uncertainty in global markets this week and increased the value of risk-averse assets like gold.

Today’s recent nonfarm payrolls report shows extremely strong growth in nonfarm payrolls which surged by 304,000 according to the Labor Department, vastly surpassing expectations of just 170,000 outlined by Dow Jones-surveyed economists.

At the close of the first FOMC meeting of 2019, Federal Reserve Chairman Jerome Powell delivered the dovish Fed Day that markets were expecting. And then some.

235,000 people opened new claims for jobless benefits in the week ended January 26, reaching a 16-month high which seems to run contrary to what was almost 49-year low of the week before. 

Growth in employment costs has risen significantly on an annual basis, with the Q4 data indicating the highest growth since 2008 compared to Q4 2017. 

Analysts expect that the FOMC is almost certainly going to remain on hold for this week’s meeting, they will most likely reiterate previous comments about data dependence and patience when it comes to further rate hikes. The balance sheet will be the big focal point for Wednesday’s meeting, however not much is expected in terms of formal changes to the balance sheet policy.