Key events to affect XAU/USD prices (Aug 26 - Sep 01)
Hello, fellow traders!
This week's economic calendar features a range of important indicators from major economies around the world. From business climate indices to inflation rates and GDP growth figures, these reports will provide valuable insights into the current state of the global economy.
Here’s a snapshot of all the high-priority economic events for August 26 - September 01.
Let's dive into the specifics:
Monday, August 26
Germany’s IFO Business Climate Index: measures the overall business sentiment among German companies. It’s based on a survey of around 9,000 businesses across various sectors like manufacturing, construction, and services. High index means businesses are optimistic about the economy and expect good sales, growth, and a stable environment. Low index signals that companies are worried about the economy, possibly expecting a slowdown or even a recession.
Why it matters for Gold: If the IFO index shows strong business confidence, it suggests that the economy is doing well. This might lead investors to take on more risk by buying stocks and other assets instead of Gold. As a result, the demand for XAU/USD might decrease, pushing its price down. On the contrary, if the index shows that businesses are pessimistic, investors might get nervous about the economy and start buying Gold as a safe investment, increasing demand and driving the price up.
The U.S. Durable Goods Orders: measures the amount of new orders placed with manufacturers for durable goods. It provides insight into the health of the manufacturing sector and the overall economy.
Why it matters for Gold: if the report shows a surprising drop, markets might interpret this as a sign of economic trouble ahead. Investors could then flock to Gold as a protective measure, leading to a rise in XAU/USD. Conversely, a strong report could lead to a dip in Gold prices as confidence in the economy grows.
Tuesday, August 27
The U.S. Johnson Redbook Index: a weekly measure of same-store sales growth in a sample of large US general merchandise retailers. It gives us a quick look at how retail sales are doing in the country and gives clues about consumer spending.
Why it matters for Gold: If people are spending more in stores, it usually means they're feeling good about their finances and the economy. This can lead to higher inflation expectations. Also, if consumer spending is strong, the Federal Reserve might be more likely to keep interest rates high, which typically makes Gold less attractive compared to interest-bearing assets. However, if the index is weaker than expected, it could support Gold prices. Investors might see Gold as a safer option if they're worried about economic slowdown.
Wednesday, August 28
Australia’s Monthly CPI Indicator: measures the average change in prices of goods and services purchased by households over a month. It’s an important gauge of inflation, showing how much prices are rising or falling in the economy. High inflation means that prices are rising quickly, which can reduce consumers' purchasing power and lead to higher interest rates. Low inflation, on the other hand, indicates stable or slowly increasing prices, which can be good for consumers but might suggest a sluggish economy.
Why it matters for Gold: Gold is sensitive to inflation data because inflation affects interest rates, currency values, and overall economic stability. If the CPI shows that inflation is rising faster than expected, it could signal that the Reserve Bank of Australia (RBA) might raise interest rates to control inflation, making Gold less attractive because Gold doesn’t earn interest. However, if inflation is rising sharply, investors might still buy Gold as a hedge against the loss of purchasing power, potentially pushing XAUUSD higher.
On the contrary, if inflation is lower than expected, it might suggest that the economy is not overheating and that the RBA might keep interest rates low, possibly leading to higher Gold prices. Plus, if the low CPI indicates economic weakness, it could also trigger safe-haven buying of Gold, supporting XAU/USD.
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