The Daily Market Report: Gold Consolidates Ahead of FOMC Minutes

USAGOLD/Peter Grant/10-11-17

Gold is maintaining a consolidative tone as traders await the minutes from the September FOMC meeting at 2:00ET. The recent bounce in the dollar seems to have lost momentum, which should help to underpin the yellow metal.

Immediately following the FOMC meeting, Janet Yellen warned that “payroll employment may be substantially affected in September” as a result of the hurricanes. However, the actual NFP print for the month was well below even the most pessimistic projection.

While a payrolls rebound would seem likely for this month, pay attention to the trend. If there is another bad number (it need not be negative necessarily), maintaining the “labor market continued to strengthen” line will become difficult. If the Fed is missing on both the inflation and jobs fronts, it seems like a rate hike in December would be ill-advised.

However, we won’t get the next jobs report for several more weeks. Until then, look for gold to garner support from the heightened geopolitical tensions and weakness in the dollar.

TASS news agency quoted North Korean Foreign Minister Ri Yong Ho as accusing President Trump of lighting “the wick of war.” Meanwhile, the U.S. and South Korea conducted more joint training missions that North Korea will assuredly view as provocative.

Catalonia sort of declared independence from Spain yesterday, saying they had the mandate to do it, but suspended it for the time being in favor of further dialog. Spain wants to know if they’ve declared independence or not and are reportedly considering direct rule over Catalonia. This saga is far from over.

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