Morning Snapshot: Gold remains well bid after solid gains over the previous 3-weeks
Gold remains well bid after gaining 1% last week, and more than 4% over the previous 3-weeks. A number of key technical levels have been exceeded in recent weeks, shifting focus to the 1296.06/1300.00 level.
The Fed blinked last week in the face of slowing inflation and persistent tepid growth. After a rather dovish FOMC statement, September rate hike prospects crashed to zero-percent. More recently, they edged back up to 1.4%, but I think we can call September off the table at this point.
While advance Q2 GDP met expectations last week, the negative revision to Q1 growth added further weight to those rate hike expectations and therefore the dollar. Ongoing weakness in the greenback should continue to provide a tailwind to the gold market.
Today’s U.S. calendar has July Chicago PMI, June pending home sales, June ag prices and the Dallas Fed index for July. PCE comes out tomorrow and will likely confirm inflation weakness seen in the advance GDP report. On Friday we’ll get the July jobs report. Expectations for nonfarm payrolls is +181k. The jobless rate is expected to tick down to 4.3%.