This Week’s Insights for FunderPro’s Traders
- Gold prices have risen at least 1% on Middle East tensions
- September’s jobs report data exceeded market expectations
Fueled by Conflict
Ongoing clashes erupting in the Middle East are driving up the price of gold, with a surge of more than 1% on Monday. Two days ago, on Saturday, Israel witnessed a surprise attack from Palestinian militant group Hamas, followed by a declaration of a “state of war” from the Israeli government.
With the conflict intensifying, investors are clamoring to safe-haven assets such as the bullion. Following a tough week, where it approached 7-month lows, the yellow metal is currently trading at $1,848/oz. Gold futures climbed as high as 1.2% earlier today, to $1,868 before dipping back down to around 1.05%, or $1,864.
The ongoing clashes between Israel and Palestine are not the only factor impacting the precious metal. Gold, which is a non-yielding asset, may be less appealing to investors should the Federal Reserve decide to raise interest rates at their Oct 31 – Nov 1 meeting. With September’s jobs data, it looks unlikely that the Fed is planning to lower its benchmark interest rate in the near future.
September’s jobs report crushed expectations, with double the amount of jobs created than what economists predicted. The print showed that an astonishing 336,000 jobs were created last month, annihilating economists’ 170,000 predictions.
Leisure and hospitality dominated the growth with a reported 96,000 jobs created, followed by industries such as science and healthcare. In a hot labor market, there is reprieve in the form of cool wage growth. Average hourly earnings only rose by 0.2%, or 7 cents. This trend can be viewed as an indicator of steady growth, as when wages increase, inflation may too, creating a prolonged cycle. As for the unemployment rate, it held steady at 3.8%, defeating expectations of a 0.1% decrease.
The three major indexes ticked up after the release of the jobs data. The Nasdaq rose 1.6%, with the S&P 500 following closely behind with a raise of 1.2%. The Dow Jones Industrial Average saw the least growth, with 0.9%.
With an interesting economic calendar down the week, traders have some events to keep their eyes on.
Markets can look ahead to Wednesday’s PPI report and Thursday’s CPI data. The Producer Price Index (PPI) measures the average change of prices for domestic sellers, while the Consumer Price Index (CPI) measures the average change of prices paid by consumers for goods and services. In other words, inflation data.
With a busy week ahead, now may be the time to create a strategy to avoid any losses during periods of market volatility.