Last week, we observed increased volatility in precious metals.
On the first trading day of last week, the U.S. Services Purchasing Managers' Price Index (PMI) figures were announced. While the expectation was 58.5, the actual figure came in at 56.8. This could signal a slowdown in U.S. economic activity.
When examining the U.S. labor market, the Job Openings and Labor Turnover Survey (JOLTS) came in at 8.098 million, exceeding the expectation of 7.730 million. Initial Jobless Claims were expected at 214K but were reported at 201K. Last Friday, the Non-Farm Payrolls data was released, with expectations of 164K, but the actual figure was 256K. Additionally, the Unemployment Rate was anticipated to be 4.2%, but it came in at 4.1%, signaling that the U.S. labor market strengthened last month.
Following the strong employment data, the Dollar Index tested levels above 110.00. Meanwhile, demand for gold increased again due to political uncertainties. For the week ahead, attention is on the inauguration of Donald Trump as U.S. President on January 20 and the ongoing uncertainty surrounding tax tariffs.
As of this week, we are waiting for critical data. Eyes will be on the data from the U.S.! This week, key indicators such as the Producer Price Index (PPI), Consumer Price Index (CPI) from the U.S., and Gross Domestic Product (GDP) figures from China will be in focus for precious metals. The inflation (CPI) expectations in the U.S. are around 2.90%, compared to the previous month’s figure of 2.70%. U.S. inflation data will be released on Wednesday. If the headline inflation figure comes in below expectations, demand for precious metals may increase once again.
