After the gold price (XAU/USD) lost around 6.50 percent of its value in September, investors are now hoping for a possible stabilization. In the new trading week, monetary policy developments in the USA will once again be in focus, after a weaker than expected US labor market report already took some wind out of concerns about interest rate hikes last Friday. The tense political situation in France is also likely to remain a topic of discussion.
Gold chart on a monthly basis
Fiscal and political situation in France could boost gold prices – Weak US job market supports it
The challenging fiscal and political situation in neighboring France has overall caused uncertainty in the Eurozone. Concerns about an euro debt crisis could tend to increase the appeal of the precious metal.
Recent signs from the US job market could provide further support. In September, the labor market in the world’s largest economy saw a surprising sharp decline. Overall, 29,000 new jobs were created outside the agricultural sector, significantly less than expected (90,000). The unemployment rate also rose by 0.1 percent to 4.2 percent in this context. The prospect of less restrictive monetary policy in the US can tend to increase the opportunity costs of holding interest-free assets such as gold.
Purchasing managers from the USA all met expectations
The ISM Purchasing Managers’ Index for the services sector fell slightly short of expectations with 54.9 points. A figure of 55 points was expected ahead of the survey, after 55.4 units last month.
As early as last Thursday, the counterpart to the manufacturing sector was unable to entirely meet expectations of 55 points (54.5 points).
After US central bank interest rate hike: Fed notes are expected to provide important monetary policy impulses
The FOMC minutes will be on the agenda on Wednesday evening (20:00). Investors are likely to expect new monetary policy impulses in this context.
The US Federal Reserve (Fed) had, as expected on September 16, increased interest rates by a quarter of a percentage point, bringing the interest rate band to 3.75 to 4.00 percent. This was also the first increase since July 2023. Moreover, the monetary authorities unanimously voted in favor of the decision.
