Gold Fell on Easing Geopolitical Tensions and Hawkish Central Bank - icdx.co.id
  • (11/06 – 15/06) The price of ICDX’s Gold ended below $1290 Level.
  • U.S and North Korea Summit generated a good results.
  • ECB was planning to halve and end the easing program.
  • The Fed rose their Fed Funds Target Rate.

Market Review

Last week, the gold price ended down as major issues from US deliver a good result, thus reduce the risk aversion sentiment from the gold investor across the world.

The Trump and Kim summit in Singapore, regarding the end of North Korea nuclear program, resulting commitment of denuclearization from North Korea, while US provide security guarantee to North Korea. The positive outcome reduce the potential geopolitical turmoil and limit the gold price to rise last week.

Other issues came from US President Trump, who were announcing import tariff on $50 billion Chinese goods, but responded differently by the gold price and end the Friday session lower.

As expected, the Fed once again rose their target rate to 1.75-2.00%, but as the move already absorbed by the market, USD index moved lower and kept the gold price steady below $1300 level after the announcement.

ECB, last week, were planning to halve its bonds buying to €15 billion a month from October and ended the program by the end of the year. The statement was limiting the gold price to rise above $1300 level and made the price ended below $1290 level.

Chart Under Pressure Gold- icdx.co.id

Price Performance Indicators

Previous Week % Change
GOLDUD $ 1280.40 -1.52%
GOLDID Rp 17,793,000 -1.55%
GOLDGR Rp 577,900 -1.53%
XAUUSD $ 1278.94 -1.66%
COMEX $ 1278.50 -1.90%
USD/IDR Rp 13,902 0.00%

Market View

Trade War between US & China on Focus

While any geopolitical risk and economic issues has passed last week with positive outcome, another negative issue from US and China still come in play as the fear of protectionism international trade still on the edge. The Chinese were planning to impose additional 25% tariffs on 659 US goods worth $50 billion to respond on US action last Friday. Will this issue make the gold price to be more fluctuate around $1300 level, with the rise of market risk aversion – avoiding the risk of trade war?

OPEC Meeting

With the WTI oil price fell to below $66/barrel level, the OPEC meeting on 22-23 June will be the most anticipated event this week as it will plays the market risk sentiment. For the meeting, Saudi Arabia and Russia are looking to increase their production, meanwhile the issue is not unanimous with other OPEC member. Will the OPEC meeting drive the market risk sentiment and affect the gold price this week?

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Date Data/Events Actual Expectation Previous
19/Jun Euro Zone – ECB President Draghi Speaks N/A N/A
19/Jun AU – RBA Minutes N/A N/A
19/Jun U.S. – Building Permits (May) 1.35M 1.36M
20/Jun JP – BoJ Gov. Kuroda Speaks N/A N/A
20/Jun U.S. – Fed Chair Powell Speaks N/A N/A
22/Jun OPEC Meeting N/A N/A

Source: ICDX Research




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