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Weak Export Data Hold CPO Price to Rise  - icdx.co.id
  • (13/11 - 20/11) Gold price corrected for 0.90% after fluctuating
  • Expectations for stimulus is back instensified

Market Review

Throughout last week, gold price has fluctuated on the back of a number of developments in global sentiment that revolved around the headlines of COVID-19 pandemic and lingering market’s hopes to the US response through further stimulus. On a weekly basis, gold closed last week's trading session with a narrow correction range of 0.90% to the level of $ 1,870.70 per troy ounce.

From the pandemic’s headline, a trial report from Moderna and Pfizer which states that the vaccine is 95% effective, had a chance to balance market sentiment. However, the optimism of two success products is instead overshadowed by the the increasing reports in COVID-19 new cases that have soared wordlwide. Last week, the increase in C-19 cases worldwide surged again and almost reached the highest increase in cases since the beginning of the pandemic. One of the countries that still recorded the most increase - apart from Japan and a number of European countries - was the US, which had an increase of nearly 200 thousand new cases per day.

Regarding the issue of US stimulus, the next elected President, Joe Biden, is seen calling for and expecting support from the Republican Party to be in line with the provision of the stimulus package after President Trump stepped down from White House in January. Furthermore, the statement from Steven Mnuchin again reminded that a number of stimulus packages that have been disbursed will be due at the end of this year. The statement also added that the allocation of funds of $ 455 billion allocated to the CARES Act, the non-profit organization that funds business lending by the Fed, and local governments should be reallocated by Congress.

With the softer economic calendar this week, especially from the US, the two headlines above will hold the main steering wheel of market sentiment - which will directly impact gold prices as a reflection of the global risk-aversion direction.

Chart CPO 181105 - icdx.co.id

Price Performance Indicators

Previous Week % Change
GOLDUD $ 1,870.70 -0.90%
GOLDID Rp 26,819 -1.15%
GOLDGR Rp 871,500 -1.02%
XAUUSD $ 1,888.04 -0.93%
COMEX $ 1,886.20 -0.73%
USD/IDR Rp 14,216 -0.12%

Market View

Potential Vaccine Approval in Mid-December

According to some experts, there is a potential deadline for vaccine approval in mid-December by the US FDA (Food and Drug Administration). This timeframe is likely to be the main focus over the next few weeks, as it can dim the risk-aversion sentiment that is still triggered by the headline of the COVID-19 pandemic. To date, although there have been two registered brands of vaccines that are effective, the surge that is still occurring in a number of major economies will still overshadow market sentiment.

US stimulus as a focus for gold sentiment

Some of the US domestic stimulus programs are set to expire on December 31, but according to Mnuchin's statement, there is a potential for the resumption of stimulus negotiations in Congress. Given the potential for a new stimulus - which the market has been waiting for for a long time - gold prices can respond aggressively according to market expectations.

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Date Data/Events Actual Expectation Previous
25/Nov US – Prelim GDP q/q - 33.10% 33.10%
25/Nov US - Unemployment Claims - 733K 742K
26/Nov US – FOMC Meeting Minutes - - -

Sumber: Riset ICDX




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