Australia's GDP Shows Weak Performance

On December 4, 2024, the Australian Bureau of Statistics released a noteworthy statement regarding the country's economic performanceFollowing meticulous seasonal adjustments and a precise calculation methodology, it was reported that Australia’s Gross Domestic Product (GDP) exhibited a quarterly growth of 0.3% for the third quarter of 2024. This revelation comes in light of expectations from various market experts who predicted a more robust quarterly growth of 0.4%. This marks the 12th consecutive quarter of upward movement in Australia’s GDPNotably, in the first two quarters of this year, GDP growth had stabilized at 0.2% each quarterHowever, when viewed from the lens of per capita GDP, it tells a different story; during the third quarter, the per capita GDP recorded a decline of 0.3%, marking the seventh consecutive quarter of negative growth in this metric

This decline is a clear indication that Australia is grappling with a per capita economic recession.

Katherine Keenan, the head of National Accounts at the Australian Bureau of Statistics, emphasized that while the economy has successfully maintained growth for over three years, the rate of growth this quarter has noticeably slowed compared to the third quarter of 2023. A deeper examination reveals that the surge in GDP growth for this quarter was largely attributed to public sector spending, with government expenditure increasing by 1.4% quarter-on-quarter and public investment skyrocketing by 6.3%. These two components contributed approximately 0.3 percentage points to the GDP growth, acting as pivotal engines for the economic expansion seen this seasonThis reliance on government spending raises pertinent questions about the sustainability of such growth in the long term.

Furthermore, the dynamics of the silver market are also worth noting

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Michael DiRienzo, the president and CEO of the Silver Institute, shared his insights regarding the precious metal’s performance in light of recent challengesAlthough short-term pressures, including tariff threats impacting industrial demand, have created an uncertain outlook, DiRienzo pointed out that factors might emerge over the coming year that could fortify silver’s price potentialDuring an interview, he avoided making explicit price predictions for silver in 2025, which he declared as a policy, yet he expressed optimism regarding analysts' forecastsHe mentioned, “If next year the silver price hits $36, $37, or $38 per ounce, an average price around $32 to $33 would certainly please the marketThere’s a reason these banks are making such predictions; silver continues to be an invaluable resource, particularly with the advent of the green revolution.” This suggests a complex interplay between market forces and the emerging demands of sustainable technologies that could bolster silver’s value in the future.

In the context of market performance today, a number of indicators are anticipated to draw attention, including the finalized UK Services PMI for November, the US ADP employment change figures for November, as well as adjustments to the US Durable Goods Orders and Factory Orders from October

These reports are crucial in forecasting economic trends and investor sentiment.

Turning to the gold market, it has experienced some fluctuations recently, showing minor gainsCurrent trading positions reflect gold prices around $2650. The support for gold can be attributed to profit-taking from short positions, coupled with a decline in the US dollar index, driven by expectations of an interest rate cut by the Federal Reserve in DecemberAdditionally, the persistent geopolitical tensions that provoke risk-averse sentiments among investors continue to support gold’s appeal as a safe havenFor today, attention is warranted around a pressure point at $2660, with support identified near $2640.

When examining the Australian dollar against the US dollar, the Aussie has demonstrated a modest upward movement, closing slightly higher yesterdayFactors rallying its strength include the constraints placed on the dollar index due to the anticipated rate cuts from the Federal Reserve in December

However, robust economic indicators from the US have limited the Australian dollar’s capacity to decline significantlyEarly trading sessions today reflected pressure on the Australian dollar following the release of disappointing GDP figures, indicating a trading position near 0.6440. Observations today should include the pressure level around 0.6550, with support at approximately 0.6350.

In the USD/JPY currency pair, fluctuations marked yesterday’s trading sessions with slight upwards movement as wellThe current exchange rates hover around 150.10. Just like with the Australian dollar, short-covering played a role in providing some level of supportHowever, the positive economic data from the US counterbalanced the effects of this growth, creating a moderate trading environmentUpcoming considerations include pressure levels around 151.00 and support at approximately 149.00, fueled by the divergent monetary policy outlooks between the Federal Reserve and the Bank of Japan.

As markets evolve, the interconnectedness of economic data and currency performance paints a vivid picture of how nations navigate their fiscal landscapes