Gold gains after IJC rise; Little surprise from Lagarde

Summary:

• Lagarde’s 1st press conference contains no shocks

• US unemployment claims rise sharply, PPI misses

• Gold moves to 5-week high above $1485

Christine Lagarde’s 1st press conference as ECB president has delivered no major shocks and as such there’s not been any major lasting moves in the single currency or the European stock markets. There were minor tweaks to both the GDP and inflation forecasts but on the whole this has come and gone as something of a non-event as was perhaps expected given the recent move from her predecessor to provide additional monetary stimulus.

Despite a few little tweaks to the ECB forecasts, on the whole there’s little changed here. Source: ECB 

If there wasn’t much of a move from the latest news from the ECB there has been a notable and outsized move in Gold after some worse than expected data from across the pond for the US dollar. The weekly initial jobless claims is normally not too market moving but a big spike in the latest read has likely played a role in the rally for Gold. A reading of 252k was well above the 213k expected and further above the 203k prior and in fact you have to go back to September 2017 to find a higher reading. 

At the same time some inflation figures came in below forecast with the PPI final demand Y/Y remaining at +1.1% despite calls for an increase to +1.3%. The ex food and energy print also supported this weakness with a reading of +1.3% Y/Y vs +1.7% exp. This data was in contrast to the more widely viewed CPI released yesterday which showed rising price pressures. 

Gold has made two distinct moves higher in the past 24 hours, 1st after the FOMC decision was announced and more recently after the release of US data. Source: xStation  

Gold has moved up to a 5-week high in recent trade and the precious metal appears to be making an attempt at breaking higher. The $1484 level can be seen as a line in the sand on a daily closing basis. Source: xStation