Central banks hold ~20% of all the gold that has ever been mined. The sheer holding size is why central banks around the world can significantly influence gold prices
Let’s explore the major labor market indicators that investors should keep an eye on, allowing them to form a view about the overall job market in the US.
In the long term, other factors could be more important—like increasing US debt and plateauing supply. These factors could work in favor of gold prices. You should watch these factors closely.
The debt-to-gross domestic product (or GDP) ratio that shows how much a country owes compared to how much it earns. Investors use the ratio to measure a country’s ability to make future payments on its debt.
The Organisation of Petroleum Exporting Countries (or OPEC) had a meeting in Vienna on November 27. Some countries, like Venezuela and Iran, wanted the cartel to cut back on production to prop up oil prices.
China cut its interest rate unexpectedly on November 21, stepping up a campaign to prop up growth in the world’s second-largest economy.
You should analyze these gold indicators together since many of them are interrelated. They show the direction of gold prices and gold-backed ETFs.
Gold underperforms when the rising real rate decreases the gold’s attractiveness since investors would rather invest in more attractive bank deposits.
Gold’s price is impacted by the difference between indicators in the US and the rest of the world. The US dollar impacts gold the most.
Economists expect that going forward, consumer spending should pick up as people start to spend their windfalls from falling oil prices.
Cheaper oil means lower inflation. This means gold should be negatively impacted, as it is usually considered to be a hedge against inflation.
Overall gold holdings in ETFs were 1,643 tons as of November 4, which is its lowest value in five years.
The Fed has held rates near zero since December 2008, and any increase would lead the dollar to strengthen against other currencies.
The GDP growth figures for Q3, in addition to Q2’s growth, creates the strongest six-month period of expansion since 2003.
Improving consumer sentiment usually indicates an improving job market, increasing incomes, and overall positive growth prospects for the economy.
The US economy is doing better than many of its peers, and this difference usually leads to a strengthened US dollar in relation to other currencies.
ECB is considering an expansionary policy, which will help strengthen the US dollar further against the euro. A strengthened dollar is negative for gold prices.
Japan’s asset buying program’s goal is to encourage a healthy level of inflation in the economy and boost investment activity.
Strong employment rates signal strong economic growth prospects, and recent US labor market data has been quite positive.
In October, the BEA Advisory Committee said inflation in the near term will likely be held down by lower energy prices and other factors.