Jakarta, CNBC Indonesia – The price of gold is expected to be very volatile this week due to the large number of important data and agendas that will take place next week in the United States (US).
In the last trading week last Friday (26/5/2023) the price of gold on the spot market closed at US$ 1,946.33 per troy ounce. The price did strengthen 0.31%.
This reinforcement at least gives fresh air after gold slumped in the previous two trading days.
Overall, gold is down 1.52% on the week. That is, gold has fallen for three consecutive weeks.
In today’s trading, Monday (29/5/2023) at 06:24 WIB, the price of gold on the spot market was observed at US$ 1,944.27 per troy ounce. The price weakened 0.1%.
The price of gold is expected to be volatile this week in line with the many important data that will be released this week.
Among them are US unemployment figures for April which will be released on Friday this week. The US unemployment rate registered 3.4% in April, from 3.5% in March 2023.
The unemployment rate is projected to only slightly increase by 3.6% in May 2023. It is difficult for the US unemployment rate to fall quickly due to the large demand for labor.
This condition made it difficult for inflation in the US to fall quickly and as a result the US central bank The Federal Reserve (The Fed) found it difficult to soften.
If the US unemployment rate is still difficult to fall quickly or even fall, the price of gold is expected to fall.
This week, the US will also announce its manufacturing activities which can be a reflection of the US economic movement, whether it is still fast or weak.
This week, two Fed officials will also deliver speeches namely Governor Michelle W. Bowman and Governor Philip N. Jefferson on Wednesday this week (31/5/2023)
Statements from the two of them will be eagerly awaited to find out what the Fed’s policy direction will be in June, whether it is still hawkish or has started to be dovish.
If both statements hawkish then get ready just gold will weaken.
However, of all the agenda above, the most important agenda this week is regarding the discussion of the US government debt ceiling or debt ceiling.
US Treasury Secretary Janet Yellen extended the fastest deadline regarding the government’s debt default (default) determination from June 1 to June 5, 2023. This means that negotiations must reach an agreement soon this week.
Reported from ReutersUS president Joe Biden and House Speaker Kevin McCarthy reportedly agreed to raise the federal government’s debt ceiling by US$31.4 trillion.
This agreement was made to end the deadlock regardingdebt ceilingthat happened for months.
However, the deal is not final and negotiations are still ongoing.
“I just got off the phone with the president (Joe Biden) a while ago. After he wasted time and refused to negotiate for months, we have reached an agreement in principle that America deserves,” McCarthy was quoted as saying. Reuters Sunday (28/5/2023)
If the US debt ceiling can be agreed then the price of gold could weaken. Gold is a safe haven to look for in times of increased risk or increased uncertainty.
If the debt crisis can be resolved then the risk of uncertainty will be reduced,
“Hope of cutting interest rates in the near future has vanished last week. This is what makes gold slumped. If the energy data worsens, there is hope that US interest rates will be cut. However, it all also depends on the debt ceiling agreement,” wrote FX Street Insight.
MUFG analyst, Ehsan Khoman, said gold could bounce back to around US$ 2,000 if the US fails to reach an agreement on increasing the debt ceiling.
“Gold can move to around US$ 2,000 if the debt crisis drags on and cannot be resolved,” said Khoman, quoted from Exchange rate.org
CNBC INDONESIA RESEARCH
research@cnbcidonesia.com
(is/is)
2023-05-29 00:00:00
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