Gold vulnerability far from over despite last week's gains
gold closed with a gain of nearly 1.40% at $1914.60 meanwhile the total known global gold ETF holdings fell by around 0.15 million troy ounces in the week as outflows accelerated.
But the highlight of the week was much-awaited Federal Reserve Chair Powell's speech at the Jackson Hole symposium on Friday. Powell didn't offer any clear clues about the possibility of a pause in the Federal Reserve's rate hike campaign as he continues to deem inflation to be quite high.
He said that growth remains above trend and rates are in the restrictive territory, nonetheless, the Central Bank will assess the situation carefully and will hike rates further if required. Although his stance remains data-dependent, his comments can be construed as mostly hawkish.
The US data released in the week were somewhat mixed as the S&P Global US composite PMI (August preliminary) at 50.40 fell short of the forecast of 51.50 and was lower than the previous reading of 52.
The services PMI came in at 51 Vs the forecast of 52.20, though it continues to be in the expansion zone. Existing home sales (July) missed the estimate; however, new home sales (July) topped the forecast.
Initial jobless claims (August 19) at 230,000 fell to a three-week low, thus indicating a still tight job market despite steep rate hikes. Headline durable goods orders (July preliminary) sank 5.20% as against the forecast of a decline by 4%, though durables ex-transportation at 0.50% beat the forecast of 0.20%.
The situation in Europe looks worrisome as the UK services PMI unexpectedly contracted for the first time since January with the August preliminary reading falling to 48.70 as against the forecast of 51.
