Last week, the economic calendar was quite busy!
On Monday, in the US, the Services Purchasing Managers' Index (PMI) figures were announced. While expectations were at 55.7, the actual figure came in at 58.5, indicating that the US economy is currently in a positive state.
On Wednesday, the highly anticipated Fed interest rate decision was announced! At its final meeting of the year, the Fed reduced rates by 0.25 basis points, bringing them down to the 4.50% range. However, it wasn’t the Fed's rate decision that shook the markets, but its future projections! The Fed’s inflation expectations for 2025 increased, and the likelihood of rate cuts reduced from four to two. This bolstered the strength of the US dollar once again! Furthermore, the Fed’s reduced expectations for future rate cuts triggered sharp sell-offs in precious metals.
On Friday, the Core Personal Consumption Expenditures (PCE) Price Index, closely monitored by the Fed, was released. Market expectations for the PCE were around 2.9%, but the actual figure came in at 2.8%. The PCE figure falling below expectations indicated that the Fed’s forecasts were not progressing in line with market expectations, leading to renewed demand for precious metals.
This week, markets are generally entering the Christmas holiday season!
During Christmas trading, we may observe reduced volumes but increased volatility. Starting from Tuesday, the effects of the holiday season will become more apparent.
The most critical trading day of the week will be Thursday!
On Thursday, we will be closely following the crucial Interest Rate Decision from Turkey. Market expectations suggest that the Central Bank of Turkey (CBRT) may cut rates by 150-200 basis points. However, future projections from the monetary policy meeting will be far more important! If expectations for continued rate cuts increase, this could lead to negative movements in the Turkish lira. In such a scenario, we may once again observe upward movements in precious metals priced in TL.
Meanwhile, geopolitical developments that influence the precious metals market have made for a volatile start to the week. Israel conducted an operation on the Nuseirat camp in Gaza, resulting in the deaths of over 50 Palestinians.
In addition, domestic demand, driven by import quotas, continues to cause price discrepancies. At the start of the week, the difference between global and Turkish markets in terms of gold prices began at around $42 per ounce.
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