As we start a new week, the eyes will be on precious metals; along with America's inflation reports, there will be conflicts in the Middle East! During the week, the speeches of FOMC members can be evaluated as oral guidance in the market.
Especially on the third trading day of the week, meeting Minutes of the Fed interest rate decision will be published last month! Tips of the interest-related path in the minutes will be being investigated by investors.
On the fourth trading day of the week, we can expect an increase in volatility compared to the rest of the week. Consumer Price Index data with critical Core Consumer Price Index from America will be announced! The Core Consumer Price Index is evaluated as an inflation report with the exception of energy and food costs, and expectations were approximately 0.2% monthly and 0.3% the previous month. In the cuff inflation report, expectations were set at 0.1%, while the previous data was announced as 0.2. So overall, the expectation of a decline in inflation is at the forefront. If we interpret the data as 2 scenarios; if the first scenario is explained above the expectations in inflation, we can observe sales in precious metals under normal conditions while the possibility of a 0.25 bp interest rate discount from the FED in November gains value. In the second scenario; in the inflation reports to be announced within expectations or below expectations; inflation is falling in the US, so the probability of a 0.50 bp interest rate cut in November can be supported somewhat. In this case, buyers can be active again on the front of precious metals.
On the other hand, not only does it continue to price precious metals because of its data economy, but Israel is expected to retaliate against Iran on the geopolitical agenda front. At this point, the dosage of the attack concerns the markets directly. The possibility of attack on possible nuclear or oil facilities could open the door for Iran's retaliatory attack. In this case, geopolitical tensions could be replaced by regional war and the demand for precious metals, the safe haven, could increase. While the demand for precious metals is expected to decrease during the recovery period in the US employment market last week, the reason for the declines is that the war is likely to be regional. In summary, the markets will be pricing both inflation and news from the Middle East!
American Inflation Rate (Annual) (US Inflation Rate (YoY)
Technical summary; as the week began, ounce of gold began from the $2650 region, while ounce of silver began around $32.20 weeks. On the other hand, precious metals will continue to be in the Middle East and in the moves of the FED. In particular, if the likelihood of the war being regional increases, we can observe the increase in demand for precious metals that are considered as safe ports. On the other hand, demand growth continues to be observed from Turkey under ounces.
The increase in domestic demand, especially due to the quota, continues to lead to price differences. At the beginning of the week, the difference between the global markets on the basis of ounces and the Turkish market started around $125. Especially in the Middle East, we can expect the current deficit to increase even more because the possibility of war will increase energy costs, in which case we can expect the quota to continue if we consider that the quota is caused by the current deficit.
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