Category: Gold Price

Gold surges, presently up about 1% at 1282.00. Move seems independent with dollar, stocks, yields little changed. Silver +2.3% at 17.21.

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Gold edges back above $1,270/oz as dollar steadies, yields slip


Reuters/Jan Harvey/11-06-17

Gold edged back above $1,270 an ounce on Monday as a steadier tone to the dollar and a drop in bond yields tempted some buyers back to the metal after its third straight weekly decline.

Prices remained under pressure from expectations that the Federal Reserve is on track to lift U.S. interest rates for a third time this year next month.

…”Gold remains stuck in a $1,263 to $1,282 range, with lower bond yields being offset by a stronger dollar,” Saxo Bank’s head of commodity research, Ole Hansen, said, adding that the market was watching President Donald Trump’s Asia tour, which will focus on North Korea’s nuclear missile programs and trade.

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Morning Snapshot: Gold Up Slightly to Start the Week

USAGOLD/Peter Grant/11-06-17

Gold is up slightly to start the week, but still well contained within the recent range. The dollar index edged to a new 15-week high of 95.08, and this strength continues to limit the upside for the yellow metal.

Lower U.S. yields and mixed stocks suggest a tempering of risk appetite. That is seen as supportive to the precious metals.

Silver is consolidating at the low end of Friday’s range after failing to sustain last week’s push back above $17. The low end of the broader range remains well protected at $16.30.

The U.S. calendar is very light today, but we will hear Fed Speak from NY Fed President William Dudley. The press is reporting that Dudley will announce his early retirement as soon as today. Outgoing Fed Chair Yellen speaks tomorrow.

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Gold better at 1272.01 (+2.23). Silver 16.91 (+0.076). Dollar firm. Euro lower. Stocks called mixed. U.S. 10-year 2.32% (-2 bps).

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The Daily Market Report: Gold Retreats Into the Range, as Markets Shrug-Off NFP Miss/Soft Wages


USAGOLD/Peter Grant/11-03-17

Gold is down intraday, having retreated back to the low-end of the recent range in the wake of today’s mixed U.S. economic data. The dollar index edged to new 15-week highs, helping to keep both gold and silver well contained.

Nonfarm payrolls rebounded in October, but missed expectations by a fairly wide margin. While September was revised higher, taking the negative print off the table, it was still a rather dismal couple months.

Average hourly earnings disappointed as well, coming in unchanged. The annualized pace of wage growth slowed to 2.4% y/y. That does not improve the prospects for higher inflation.

The market however has latched on to the downtick in the unemployment rate to a 17-year low of 4.1%, as evidence that things in the labor market are just great. A little scratching at the surface however paints a somewhat more ominous picture.

Nearly a million Americans dropped out of the labor force in October, pushing the labor force participation rate down to 62.7%. Rebounds in the participation rate in recent years have just failed to gain any traction.

In accepting President Trump’s nomination to be the next Fed Chair, Jerome Powell said he would do all he could to meet the Fed’s dual mandates of stable prices and maximum employment. Stable prices in Fed-world means 2% inflation. The central bank is clearly missing the mark on that front.

When Yellen, Powell and the rest of the FOMC looks at employment, I know they look beyond just the jobless rate. If they’re being honest, they’d have to acknowledge that it’s not all roses and sunshine on the labor front either.

That all suggests to me that the pause in the tightening cycle initiated in September, largely because of continued week inflation, just might not come to and end in December as many seem to believe. If nothing else, the surety that the market feels about a December rate hike is really overpriced. I was happy to read today that I have some good company.

Today’s pullback within the range provides an opportunity for gold investors to pick up some physical near 5-week lows. A rebound above $1300 is still needed to ease near-term pressure on the downside, with the high for this week — set yesterday at 1284.15 — marking an important intervening barrier.

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Gold demand from China picks up again

Mining.com/Cecilia Jamasmie/11-01-17

China seems to have recovered its appetite for gold, with demand for bars and jewellery markedly increasing in the first nine months of the year, data from the China Gold Association shows.

Total gold consumption, including jewellery and bullions but excluding the central bank’s purchases, went up 16% to 815.9 tonnes in the period, the association reported Wednesday according to Xinhua news agency. That’s a positive turnaround from the same period last year, when demand dropped by almost 13%.

Demand for gold bars jumped 44.5% to 222 tonnes amid rising global demand for safe haven investments. Jewellery consumption, in turn, rose 7.44% to 503.87 tonnes.

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Gold Demand Explodes Higher as China Announces Decline in Gold Production – Rory Hall


SprottMoney, via 24hGold/Rory Hall/11-03-17

It’s funny that you can’t hardly give away gold or silver in the U.S. or Europe – you know, the nations that are completely broke and need to preserve their wealth, while at the exact same time the people that are moving up the wealth ladder, China, Russia and India, are all acquiring gold and silver by the handful. What does that tell you about wealth preservation?

China seems to have recovered its appetite for gold, with demand for bars and jewellery markedly increasing in the first nine months of the year, data from the China Gold Association shows. — Mining.com

…This massive increase in physical gold demand is in light of China announcing a 10% decrease in gold mine production!

PG View: While I think that first sentence is an overstatement of the reality (see German investors rush to buy gold), Hall raises a very good question. Americans and Europeans really do need to be more concerned about wealth preservation. No asset class fills that role better than physical gold in your possession.

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Gold and silver retreat into their respective ranges as dollar firms after solid factory orders and services ISM offset the NFP miss.

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Wedding bells set to ring in fresh gold demand in India

Reuters/Rajendra Jadhav & Arpan Varghese/11-03-17

Demand for physical gold was lacklustre in top consumers India and China this week, while the lure of the metal remained stable in Singapore, but India’s peak wedding season is expected to usher in renewed interest for bullion in coming weeks.

Gold is considered an essential part of weddings in India, second-biggest consumer of the metal in the world after China, and it is a popular gift on such occasions.

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Turkey’s Gold-Buying Spree Has Market Wondering How Much and Why

Bloomberg/Eddie Van Der Walt/11-03-17

Turkey’s central bank is hoarding gold again. The question is, how much and why?

Official data show Turkey added 3.8 million ounces of gold worth almost $5 billion to reserves this year. While actual purchases could be much less — the figure is skewed by metal deposited by commercial banks — even if Turkey bought just one-third of the reported amount, it would still rank among the top two or three buyers this year.

While the central bank cited a good old-fashioned diversification policy, some analysts speculated that the country could be shoring up reserves amid rising tensions between Turkey and its traditional Western allies.

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Morning Snapshot: Gold Edges Up Within Range Following NFP Miss

USAGOLD/Peter Grant/11-03-17

Gold is up slightly this morning, nonplussed by the NFP miss and still locked within the recent range. The dollar index remains narrowly confined as well near its 3-month highs, which is helping to limit the upside for the yellow metal. Silver is up as well, maintaining recent gains above $17.00.

U.S. nonfarm payrolls rose 261k in October, below expectations of +318k and whispers in the neighborhood of +400k. As I said in commentary yesterday, forecasters set a pretty high bar, creating the risk for disappointment. September NFP was revised higher from -33k to +18k, so at least the negative print is off the books. The unemployment rate ticked down to 4.065%.

So after a terrible number in September and a smaller than expected post-Hurricane rebound in October, how is it that the jobless rate ticked lower? Zerohedge explains:

…the number of people who exited the labor force soared by a near record 968,000 in October – the third highest on record – pushing the total number of people not in the labor force to a record 95.385 million, as the civilian labor force shrunk by whopping 765,000 in one month. — Zerohedge

Average hourly earnings came in unchanged for October, below expectations of +0.2%. The annualized rate of wage growth slowed to 2.4%.

Some are claiming this should be attributed to hurricane disruptions, but the chart presented by Bloomberg suggests that wage growth was meeting resistance ahead of 3% long before this hurricane season. This is something the Fed is likely to be watching very closely going into year-end, because if already tepid wage growth has stalled, it does not bode well for the inflation pressures that Fed keeps contending are just around the corner.

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Gold lower 1274.36 (-3.40). Silver 17.10 (-0.066). Dollar and euro steady. Stocks called higher. U.S. 10-year 2.34% (unch).

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The Daily Market Report: Gold Remains Range Bound, Awaiting Fed Chair Nominee and October Jobs Report


USAGOLD/Peter Grant/11-02-17

Gold is holding to the recent range, still awaiting the Fed chair nomination and tomorrow’s release of October jobs data. The dollar is consolidating as well, near 3-month highs after the Fed did nothing yesterday to temper December rate hike expectations.

The BoE did pull the trigger today on their first rate hike since 2007. UK CPI reached 3% in September, arguably cause to tighten, although Brexit related risks still abound. With the Fed on pause since the June hike, and inflation still below target, one has to wonder why the market still sees a December hike as a sure-thing.

The U.S. House tax proposal came in pretty much as expected:

A $1.51 trillion plan to cut taxes for corporations, reduce them for some middle-class families and tilt the United States closer, but not entirely, toward the kind of tax system long championed by businesses. — NYT

The plan is to get a piece of legislation through Congress and to the President by Christmas. If that happens, you can bet it won’t look anything like what was released today. Both Republican and Democrats, along with various special interests and lobbyists will seek to shape that final legislation to their liking in the weeks ahead.

The press is now widely reporting that centrist Fed Governor Jerome (Jay) Powell is a lock to get the nomination to replace Janet Yellen as Fed chair when her term expires in February. Powell is likely to seek to perpetuate the slow and steady normalization process initiated by Yellen.

Markets are anticipating a solid rebound in nonfarm payrolls in October. Median expectations are +318k, with the jobless rate holding steady at 4.2%. That’s a pretty high bar after September saw the first negative payrolls print since 2011. While there is indeed likely to be a post-hurricanes rebound, there is room for disappointment, especially when you consider how far off-base the forecasters were last month.

We may see heightened interest in gold investment if NFP is a miss tomorrow, as that would likely diminish December rate hike expectations. That would put the dollar under renewed pressure, boosting the yellow metal in the process.

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Legend Says Gold To Surge Nearly $1,000, Ignited By Fiscal Hurricane

KWN/John Ing/11-01-17

…there is inflation, the Fed is playing semantics and sitting on an inflation time bomb. Already there are early signs of a return to “cost-push” inflation.

…Gold meantime edges higher in stealth- like fashion, as the ultimate store of value. Unlike digital currencies, gold cannot be created by a click. Gold is finite, withstanding the test of time.

…given the record debt levels and the global central bankers’ experimental move to “normalization”, we believe that the world’s biggest debt boom will end in the biggest bust.

…Most important is that gold’s recent rise shows investors are nervous. That is an important message for central banks who are unwinding their portfolios. While gold flirted with $1,300 level recently, we believe that $2,200 is still in sight within the next 18 months, particularly when so much fear stalks the world.

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Gold inches up as investors await Trump’s choice of Fed chair

Reuters/Peter Hobson/11-02-17

Gold prices inched higher on Thursday, helped by a weaker dollar and lower U.S. bond yields, as investors waited for the nomination of a new U.S. Federal Reserve chair and the unveiling of U.S. tax reform legislation later in the day.

The dollar weakened after the Fed’s decision on Wednesday to leave interest rates unchanged, but pared losses on solid U.S. data and a fall in sterling after the Bank of England accompanied its first interest rate rise in a decade with caution about future increases.

…U.S. President Donald Trump is expected on Thursday to nominate Fed Governor Jerome Powell to replace Janet Yellen as leader of the central bank. Powell is seen as less likely to push for rapid interest rate rises than other candidates.

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Morning Snapshot: Gold remains consolidative within recent range

USAGOLD/Peter Grant/11-02-17

Gold is maintaining a consolidative tone at the low end of the range that has dominated for the past several weeks. Markets are awaiting the release of the House tax plan as well as President Trump’s nomination of the next Fed chair.

The House plan is expected to be focused on a permanent cut to corporate taxes, from 35% to 20%. Additionally, the number of individual income tax brackets are to be cut and the estate tax will be repealed. However, the devil is in the details and those details are likely to have significant implications for the national debt.

Fed Governor Jerome (Jay) Powell is widely anticipated to be nominated to replace Janet Yellen as Fed chair. Powell is a centrist and is likely to perpetuate the current policy tact.

Yesterday’s Fed policy statement did nothing to curtail expectations of a December rate hike. Fed funds futures put the probability at 97%, even though inflation remains below target.

A lot of focus will also be placed on tomorrow’s release of October jobs data. The market is anticipating a sizable rebound in nonfarm payrolls of 318k, following September’s surprising negative print.

As for today’s U.S. data, it has been generally positive with a better than expected rise of 3.0% in Q3 productivity (prelim) and bigger than expected drop in initial jobless claims.

The BoE raised rates by 25 bps today. It was the first hike in a decade and they indicated that 2 more would be needed during the next two years to control prices. With UK inflation running above target, this one may have made some sense, but some are already expressing concern that the BoE is being “too upbeat.”

Sterling has firmed, which is helping to check the upside in the dollar. That in turn, may help to underpin gold investment.

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Gold steady at 1275.60 (-0.07). Silver 17.10 (-0.029). Dollar steady. Euro higher. Stocks called mixed. U.S. 10-year 2.36% (-1 bp).

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Trump’s Tax Plan Could Boost Gold and Silver


Bloomberg/Luzi-Ann Javier/10-27-17

Politicians can keep arguing whether President Donald Trump’s tax plan will benefit the middle-income families and U.S. businesses, but there’s one sector that could be a clear winner: precious metals.

The tax plan being considered in Congress would inflate the nation’s budget deficit and expand the debt, Bart Melek, head of global commodity strategy at TD Securities in Toronto, said at the Silver Industrial Conference in Washington. That deterioration in the nation’s fiscal standing is a recipe for higher silver and gold prices, he said. From 1984 through 2012, gold rose as the federal debt climbed relative to gross domestic product, Melek said.

Silver will outperform gold, surging as much as 19 percent to $20 an ounce by the end of next year, as global growth boosts industrial demand for the white metal just as mine supply slows, he said.

PG View: The House is expected to reveal their tax plan tomorrow and the calculations to determine the implications for the national debt will follow quickly…

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The Daily Market Report: Gold Firms Ahead of Fed Policy Statement, Silver Surges 2.5%


USAGOLD/Peter Grant/11-01-17

Gold heads into the Fed policy statement on a modestly more positive footing within the range. The yellow metal set a new high for the week in earlier trading before moderating slightly.

The policy statement comes out at 2:00ET. It is widely anticipated that the Fed will hold steady on policy. What remains to be seen is if they will reinforce expectations of a December hike, or seek to temper those expectations with more dovish guidance.

As always, the jobs report is also going to be seen as a potentially significant market mover. The market is looking for a solid rebound from the dismal September print of -33k jobs. Median expectations are +318k nonfarm payrolls.

That’s a pretty high bar to attain, following the first negative print in 7-yeaers. Today’s ADP survey results offered some encouragement, coming in better than expected at +235k private payrolls. However, September was negatively revised from +135k to +110k.

Silver is showing particularly good buoyancy, gaining more than 2.5% and reclaiming the 17-handle. This could be some short-covering in the paper market ahead of the Fed decision, but it’s also worth noting the improving demand picture for physical silver. The U.S. Mint reported that silver eagle sales rebounded to 1,040,000 in October, up 225% from the 320,000 sold in September. Industrial demand is reported to be improving as well.

It is believed that gold and silver will benefit from the passage of tax reform, the details of which are expected to be revealed by the House tomorrow.

The tax plan being considered in Congress would inflate the nation’s budget deficit and expand the debt, Bart Melek, head of global commodity strategy at TD Securities in Toronto, said at the Silver Industrial Conference in Washington. That deterioration in the nation’s fiscal standing is a recipe for higher silver and gold prices, he said. — Bloomberg

Gold is arguably extremely undervalued relative to stocks and other risk assets, but silver is very undervalued relative to gold. We may be seeing early signs of positioning ahead of the tax plan and that deterioration of the nation’s fiscal position.

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China’s Jan-Sept gold output down 9.98 pct y/y – state media

Reuters/11-01-17

China Central Television said on Wednesday on its website, quoting data from the China Gold Association:

* China’s Jan-Sept gold output down 9.98 percent y/y to 313.09 tonnes

* China’s Jan-Sept gold consumption up 15.49 percent y/y to 815.89 tonnes

PG View: Tighter supply and stronger demand is a recipe for higher prices.

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Gold climbs ahead of Fed statement, pick for Yellen replacement


Reuters/Jan Harvey/11-01-17

Gold climbed briefly back above $1,280 an ounce on Wednesday as caution ahead of this week’s confirmation of the new Federal Reserve chair and a policy statement from the bank prompted some to close out bets on falling prices.

Fed Governor Jerome Powell is widely tipped to take over from incumbent Janet Yellen at the head of the U.S. central bank next year. He is seen as a less hawkish and therefore more gold friendly choice than his main challenger John Taylor, a Stanford University economist.

…While the [Fed] is expected to leave rates unchanged, investors will be watching for any indications that it will press ahead with another increase next month.

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Morning Snapshot: Gold firms within range

USAGOLD/Peter Grant/11-01-17

Gold is higher within the range, but remains limited by a firm dollar and stocks. The market is awaiting the Fed’s policy decision later today.

The Fed is expected to hold steady, keeping the December rate hike on the table. However, it might be worthwhile to temper tightening expectations going into year-end, just to give themselves some leeway in the event that inflation fails to pick up.

The ADP jobs survey came in stronger than expected, perhaps creating some upside risk for Friday’s nonfarm payrolls report. Expectations are presently +318k, with the unemployment rate holding steady at 4.2%.

Later this morning we’ll see manufacturing PMI and ISM, construction spending, EIA crude stocks and domestic car and truck sales.

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Gold higher at 1275.95 (+5.81). Silver 16.95 (+0.255). Dollar higher. Euro lower. Stocks called higher. U.S. 10-year 2.39% (+1 bp).

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The Daily Market Report: Gold Weakens Within Range as Dollar Recovers


USAGOLD/Peter Grant/10-31-17

Gold has turned defensive in the range once again, weighed by a rebound in the dollar. Upbeat U.S. data also buoyed risk appetite and stocks today.

U.S. home prices and consumer confidence continue to rise. The employment cost index jumped as well, which inspires hope that wage growth and then inflation might accelerate. However, as we saw yesterday, the Fed’s preferred measure of inflation remained sluggish in September.

Will that be worth mentioning when the Fed announces policy tomorrow? And if they do, will it temper December rate hike expectations?

The ECB came out with more dovish than expected guidance last week, as did the Bank of Canada. The latter likely had an inkling that the economy had contract in August, as the rest of us found out today.

The Canadian dollar came under pressure as hopes for tighter monetary policy evaporated. The yen also dropped today after the BoJ held steady with no mention of any plans for normalization.

As I mentioned in the Morning Snapshot, it might be in the best interest of the Fed to adopt a more dovish tone tomorrow, to better align with the current policy direction of the other major central banks. No change in policy is expected at this meeting and they will likely leave the door open for a December hike, but a tempering of the high expectations of that hike might be warranted.

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Morning Snapshot: Gold retreats back into range as dollar firms on weaker yen

USAGOLD/Peter Grant/10-31-17

The consolidative tone in gold persists as the dollar remains firm and stocks rebound. The yellow metal still needs to climb back above $1300 to ease short-term pressure on the downside.

The BoJ left the policy rate unchanged at -0.1%, kept 10-year JGB rates capped “around zero” and will maintain the QE pace of ¥80 trillion per year. Despite optimism about both growth and inflation, guidance remains dovish. That pressured the yen, buoying the dollar in the process.

The Fed begins their two-day FOMC meeting today. When policy is announced tomorrow, no change is expected. While a December rate hike will remain on the table, it might behoove the central bank to start tempering those expectations; unless they truly believe inflation is on the verge of rebounding.

Expressed concern about the ongoing absence of inflation — which is the reason they paused in September — would likely halt the recent rise in the dollar. With the ECB, BoC and BoJ maintaining their dovish guidance, it might be in the best interest of the Fed to hint that the pause might be perpetuated into 2018.

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Gold lower at 1273.39 (-4.00). Silver 16.83 (-0.046). Dollar steady. Euro lower. Stocks called higher. U.S. 10-year 2.37% (unch).

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Gold Inches Higher to Kick Off Action-Packed Week

WSJ/Amrith Ramkumar & Georgi Kantchev/10-30-17

Gold prices inched higher Monday, with many investors awaiting news later in the week that could swing prices.

On Wednesday, the Federal Reserve is scheduled to release its latest statement following a two-day meeting that could offer clues about its outlook for interest rate increases moving forward. Gold struggles to compete with yield-bearing assets like Treasurys as borrowing costs rise. Additionally, President Donald Trump is expected to announce his nominee to be the next Fed chair this week. The Wall Street Journal reported that Mr. Trump is expected to nominate Fed governor Jerome Powell as his nominee.

Investors will also be paying attention to Friday’s monthly jobs report for the latest reading on the U.S. economy, which could affect expectations for future rate increases. Signs of inflation could also boost gold prices because some investors use the precious metal as a hedge against higher consumer prices.

“There’s some interest coming back into [gold] down at these levels.” — Bob Haberkorn, senior market strategist at RJO Futures.
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The Daily Market Report: Gold Firms Intraday as Busy Week Gets Underway


USAGOLD/Peter Grant/10-30-17

Gold has firmed modestly intraday, but remains well contained within the recent range. A number of important events and data releases are slated for this week, which seems to have tempered risk appetite somewhat.

We’ll get policy announcements from the BoJ, Fed and BoE this week on 31-Oct, 01-Nov and 02-Nov respectively. The BoJ is likely to hold steady on the heels of Abe’s resounding elections victory. The Fed is expected to hold steady. The BoE may hike by 25 bps to at least reverse out the post-Brexit emergency rate cut.

The Fed policy statement will be closely watched for any indication about ongoing concerns about the absence of inflation. Today’s PCE data for September showed that inflation remains below target, which is the precise reason they did not tighten in September.

With a December rate hike fully priced in, arguably the risk is toward a more dovish statement. Will there be verbiage in the statement to rattle the conviction of the hawks? There is no press conference scheduled for this FOMC.

The White House has confirmed that President Trump will be making his nomination for Fed chair this week, reportedly on Thursday. Odds have seemingly shifted in favor of centrist Fed Governor Jerome (Jay) Powell.

The House is also expected to release the details of its tax cut legislation this week. Will those details be sufficient to keep the stock market bubble inflating, or will this be a classic case of ‘buy the rumor, sell the fact?’ And perhaps most importantly, what will be the implications for the national debt, bearing in mind that the debt ceiling comes back into play on December 4.

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Gold steadies ahead of raft of central bank news

Reuters/Jan Harvey/10-30-17

Gold steadied on Monday as traders stayed on the sidelines before this week’s central bank meetings and policy news, including President Donald Trump’s expected announcement of the next Federal Reserve chair.

The U.S. central bank kicks off a two-day policy meeting on Tuesday, while the Bank of Japan and Bank of England also meet this week to discuss interest rate policy.

…”The front end of the U.S. rates curve doesn’t seem to have priced in a Taylor Rule Fed … which means that a surprise would send yields and the dollar higher, and risk assets down,” SG Forex said in a note on Monday.

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Morning Snapshot: Gold remains range bound to begin busy week

USAGOLD/Peter Grant/10-30-17

Gold starts the week as it ended, consolidative within the recent range. The dollar is a little easier, as are stocks, with risk appetite tempered somewhat ahead of this rather busy week.

The first indictments in the Russian collusion investigation are occurring today. Former Trump campaign chairman Paul Manafort and his aide Rick Gates are supposed to turn themselves in to the FBI today.

The Fed’s two-day FOMC meeting commences tomorrow. No change to policy is anticipated, but markets will be looking for further clarification of the central bank’s intentions for December. The BoJ and BoE meet this week as well.

Today’s U.S. data are a mixed bag. Personal income and consumption jumped in September. However, core PCE inflation was up a scant 0.1%. The Fed still has an inflation problem, which was the primary reason they paused the tightening cycle in September.

Politico is reporting that President Trump will make his nomination for the next Fed chair on Thursday. They reported last week that the field had narrowed to John Taylor and Jerome Powell.

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