Category: Gold Views

Gold has recouped post-NFP losses and is now trading higher on the day (more than $10 off intraday low).

So, is this short covering ahead of the weekend or have investors taken a more discerning look at today’s data?

Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold defensive as markets shrug-off weak jobs data as weather distortion

USAGOLD/Peter Grant/10-06-17

Gold remains defensive, edging to a new 7-week low as the market seems inclined — at least initially — to shrug off the weak headline jobs data as hurricane distortion. The dollar index reached a 10-week high, modestly exceeding the August high at 94.15.

U.S. nonfarm payrolls fell 33k in September, well below expectations of +87k, versus a positive revised 169k in August (was +156k). July was revised down to 138k, from 189k previously.

While the hurricanes clearly affected the data in September, payrolls began trending lower earlier in the year, before the bad weather rolled in. This may in reality not be transitory at all. So the question now is, how will the Fed view the data? They will likely be encouraged by the beat in earnings.

There is FedSpeak from Kaplan, Bostic, Dudley and Bullard today, so we won’t have to wait long for the central bank’s initial spin. In fact, Dalls Fed hawk Kaplan has already indicated on CNBC that he’s “not there yet” with regard to a December hike, but is open minded.

Posted in Gold News, Gold Price, Gold Views, Snapshot |

Gold Is ‘Worthy Of Greater Attention’ – Bloomberg Intelligence

KitcoNews/Anna Golubova/10-05-17

“With the record-setting stock market barely beating gold, the metal may be worthy of greater attention,” noted the commodity analyst in a report Wednesday.

…“Despite all of the attention on stocks, gold may be looking ahead to a more favorable endgame at a steep discount to historical highs with inflation brewing, a potential dollar peak and the lowest CBOE Volatility Index ever,” McGlone said. “The higher stocks go, the greater the reversion risk, apparently supporting gold.”

Posted in Gold News, Gold Price, Gold Views |

The Daily Market Report: Gold Consolidates at Low-End of Range as Stocks/Dollar Gain

USAGOLD/Peter Grant/10-05-17

Gold is maintaining a consolidative tone at the low of the recent range, weighed by a firmer dollar and the risk-on mindset that continues to drive stocks higher. Look for price action to be limited ahead of tomorrow’s important release of September jobs data.

The dollar index has eked out a new 7-week high at 93.96, but the August highs at 94.15 remains intact at this point. Dollar strength is being driven primarily by weakness in the euro, amid uncertainty as to the broader implications for Europe if Catalonia declares its independence from Spain on Monday.

Interest rate differentials continue to favor the dollar as well. While Janet Yellen laid out a number of concerns in a speech last week that could warrant easier monetary policy, the market now sees an 81% probability of a rate hike in December.

There does seem to be some optimism about growth, but inflation remains persistently weak. Those rate hike expectations may be tempered somewhat if the jobs report is weaker than expected. At this point, median expectations are looking for 87k new payrolls added in September and the jobless rate to hold steady at 4.4%.

If the real underlying purpose of tighter policy is to let some of the air out of asset bubbles, clearly the Fed is going to have to get more aggressive. At this point, good news is good news and bad news is good news for stocks. That however can not go on forever and gold is displaying good resilience in the face of this solid risk appetite.

Posted in Daily Market Report, Gold News, Gold Price, Gold Views |

Gold edges higher on bargain-hunting after correction

Reuters/Eric Onstad/10-05-17

Gold ticked higher on Thursday as some speculators bet that a slide from last month’s peak had run its course as they waited for more clues on whether U.S. interest rates would be raised.

…”Now the market is looking for data that can solidify the sentiment that the correction is over, but so far we haven’t really seen that. The Fed speakers later today and the job report tomorrow may give indications of whether the Fed wants to act or not in December.”

…”The North Korea news has died down but it could come back at any time. I would be pretty cautious to go short from here…”

Posted in Gold News, Gold Price, Gold Views |

Germany’s golden decade

World Gold Council/10-05-17

Germany’s gold investment market has boomed in the past 10 years. In the face of successive financial crises and loose monetary policy, German investors turned to gold to protect their wealth. In response, new product providers entered the market making it easier for people to invest. Last year, more than €6bn was ploughed into gold investment products in Germany and, encouragingly, there is room for further growth: consumer research indicates there is latent retail demand which the industry can tap into.

In 2016, €6.8bn was ploughed into German gold investment products

PG View: That’s really impressive demand for a safe-haven when the mainstream financial press is telling us everything is great. The Germans seem to think otherwise . . .

Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold consolidates ahead of tomorrow’s NFP data

USAGOLD/Peter Grant/10-05-17

Gold is consolidating within yesterday’s range as the market looks ahead to tomorrow’s jobs report. Solid resistance in the dollar index has capped the upside thus far, which is helping underpin gold as well.

U.S. initial jobless claims fell 12k last week as hurricane affects work there way through the system. However, a soft 87k rise in nonfarm payrolls is anticipated for September, with perhaps some downside risk based on the ADP jobs survey miss yesterday.

Recent strength in PMI data has pushed December rate hike expectations back above 80%, but weak jobs data could reverse that bias. If rate hike expectations dim again, look for the greenback to retrace recent gains, shich should bolster gold.

Posted in Gold News, Gold Price, Gold Views, Snapshot |

Gold Market Is In ‘Very Good Shape’ – Rick Rule

KitcoNews/Daniela Cambone/10-04-17

Despite a slip in the gold price, one longtime expert says the market is still in “very good shape.” Speaking with Kitco News, Sprott U.S. Holdings CEO Rick Rule said he thinks gold is setting itself up for further gains. “The most important determinant of gold prices for the last 40 years has been they have been negatively correlated with faith the U.S. dollar and faith in the U.S. 10-year treasury,” he explained. “The U.S. 10-year Treasury is, I believe, close to the end of a 35-year bull market. That would suggest gold is much closer to the beginning of a bull market.”

Posted in Gold News, Gold Price, Gold Views |

Gold gains as talk of dovish Fed chair knocks dollar

Reuters/Maytaal Angel/01-04-17

Gold rose on Wednesday after marking a seven-week low the previous session, as the dollar dipped on talk that a dovish Federal Reserve chair would be appointed next year.

The greenback eased against a currency basket after a Politico report said Fed Governor Jerome Powell was favoured by U.S. Treasury Secretary Steven Mnuchin over former governor Kevin Warsh. Janet Yellen’s term as chair expires in February.

Powell is seen as more dovish than Warsh, who has criticised the Fed’s bond-buying programme in the past.

PG View: And thanks to Jeff Gundlach, über-dove Neel Kashkari has been forced into the mix as well.

Posted in Central Banks, Fed, Gold News, Gold Price, Gold Views, Politics |

Morning Snapshot: Gold firms as dollar retreats from resistance

USAGOLD/Peter Grant/10-04-17

Gold firmed in overseas trading after the dollar backed off its recent highs. While some of the yellow metal’s gains have already been retraced, the dollar is up against a formidable resistance level and is quite overbought.

The U.S. ADP jobs survey came in below expectations, weighed by weather affects. This sets up some downside risk for the already weak September nonfarm payrolls expectations.

Reuters is reporting that Catalonia will declare independence from Spain on Monday. Does Mariano Rajoy and the government of Spain allow that to happen? Given the violence already used in an effort to squelch the referendum, will they go so far as to shut down the Catalonian Parliament?

Jeff Gundlach is predicting that Neel Kashkari will be the next Fed chair. “He happens to be the most easy money guy that’s in the Federal Reserve system today and that’s why he may win,” said Gundlach. That’s the exact reason that I thought he might seek to reappoint Yellen and why Kevin Warsh was an unlikely candidate. Easy policy and a weak dollar would certainly make execution of President Trump’s economic agenda more likely to be successful.

Posted in Gold News, Gold Price, Gold Views, Snapshot |

The Daily Market Report: Gold Firms Slightly as Dollar Meets Resistance

USAGOLD/Peter Grant/10-03-17

Gold firmed slightly intraday after eking out a 7-week low in overseas trade. The yellow metal continues to be pressured by heightened risk appetite associated with the President’s tax cut proposal and a firmer dollar.

The greenback has garnered support both from the proposed tax cut and rising expectations that the Fed will lift rates one more time this year, despite persistently weak inflation. The dollar index also set a 7-week high today, shy of good resistance at 94.14.

The overall trend remains unmistakably negative since peaking 103.82 early in the year. That means the dollar index is still down about 10% year-to-date, even after the last 3-weeks of gains.

As noted in this morning’s snapshot, the next big event will be the release of September jobs data on Friday. Expectations are running at just +87k for nonfarm payrolls, factoring in a significant weather related hit. Even if NFP misses expectations, the market may quickly discount the news as temporary hurricane fallout, but will the Fed discount a bad number as well?

North Korea threatened to “bring nuclear clouds to the Japanese archipelago,” while mocking PM Abe as a “headless chicken.” Japan is definitely within missile range and Pyongyang says they will be “the first victim of nuclear disaster in the world.”

Japan called the latest threats outrageous and provocative. I imagine they, along with South Korea, wish President Trump would quit poking the hornet’s nest via Twitter.

Until the U.S. evacuates not essential military personnel and family members from the region, it seems unlikely that the U.S. will initiate any action against the DPKR. However, the constant goading from each side makes the situation inherently unstable and provides an underpinning to the gold market.

Posted in Daily Market Report, Gold News, Gold Price, Gold Views |

Gold Pares Losses As Bargain Hunters Step In To Buy The Dip

KitcoNews/Jim Wyckoff/10-03-17

Gold is trading near steady levels on the day, in late-morning action Tuesday. The early price weakness that saw the gold market hit a seven-week low overnight prompted traders to step in and buy the dip on some bargain hunting and on short covering from the futures traders. Gold bulls are still in trouble as prices are in a steep three-week-old downtrend on the daily bar chart. December gold was last down $0.10 at $1,275.80.

Posted in Gold News, Gold Price, Gold Views |

Gold falls to 7-week low as rate hike expectations rise

Reuters/Peter Hobson/10-03-17

Gold fell to its lowest in seven weeks on Tuesday after strong U.S. economic data reinforced expectations of another interest rate rise in the United States this year and pushed the dollar and U.S. bond yields higher.

The CME’s Fedwatch indicator showed markets were pricing in a 77 percent likelihood of a December rate rise after Monday’s data showed a surge in U.S. manufacturing activity.

Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold remains soft near 6-week lows

USAGOLD/Peter Grant/10-03-17

Gold is trading in a narrow range, having edged to a new 6-week low overseas. Heightened risk appetite and December rate hike expectations have sparked a rebound in the dollar over the past three-plus weeks, which has weighed on the yellow metal.

Today’s economic calendar is very light with just September auto sales. Traders may already be looking ahead to Friday’s jobs data. Median expectations for nonfarm payrolls is just +87k. The unemployment rate is expected to hold steady at 4.4%.

Additionally, Chinese markets are closed this week for the Golden Week holiday, which is likely sapping Asian demand. This year they are calling it a “Super” Golden Week because the Mid-Autumn Festival coincides with the National Day holiday. China’s tourism administration says they expect about half of the 1.3 billion population to be on the move this week.

Posted in Gold News, Gold Price, Gold Views, Snapshot |

The Daily Market Report: Gold Remains Defensive Amid Heightened Risk Appetite

USAGOLD/Peter Grant/10-02-17

Gold retreated further to begin the week, setting a new 6-week low at 1271.15 amid heightened risk appetite and a firmer dollar. There has also been no significant heightening of geopolitical tensions of late, which may be also weighing on the yellow metal.

December rate hike expectations have eased somewhat in the wake of last week’s soft inflation data, but investors still seem to be thinking the Fed is more likely to tighten than not. Mixed data today didn’t offer any clarity on that point.

Minneapolis Fed dove Kashkari thinks the central bank should be cautious until inflation gets back to 2%. However, later today Dallas Fed hawk Kaplan will likely offer the contrary opinion.

Further stoking risk appetite is the GOP tax plan, which includes a significant cut to corporate taxes. While stocks are perhaps understandably optimistic about the likely impact on profits, there is also a reasonable concern that the lower tax revenue is going to lead to bigger deficits and a bigger national debt.

Amid the initial euphoria of lower taxes for some, little attention is being paid to the downstream implications for deficits, the debt, Treasuries, the dollar and by extension monetary policy. Can the Fed really pursue tighter policy if the tax plan is going to blow a hole in the budget?

Posted in Daily Market Report, Gold News, Gold Price, Gold Views |

Gold hits near 7-week low as rising U.S. yields lift dollar

Reuters/Jan Harvey/10-02-17

Gold fell to its lowest since mid August on Monday as rising U.S. Treasury yields pushed the dollar higher, while concerns over violence during Catalonia’s independence vote at the weekend weighed on the euro.

Expectations that the Federal Reserve will push ahead with a third U.S. interest rate hike this year, upbeat U.S. data and talk of a possibly more hawkish successor to Fed Chair Janet Yellen all lifted Treasury yields.

…”The recent selloff is mostly related to a stirring of the reflation trade following the announcement by the Trump administration of the long-awaited tax reform proposal,” Mitsubishi analyst Jonathan Butler said.

Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold maintains defensive posture to begin the week

USAGOLD/Peter Grant/10-02-17

Gold remains on the defensive after Friday’s soft close. The yellow metal is being weighed by a rebound in the dollar to challenge last week’s highs and revived risk appetite amid investor hopes for U.S. tax cuts.

Dollar gains are primarily associated with euro weakness in the wake of the Catalonia referendum that has thrown Spain — and the broader EU — into crisis.

Today’s calendar includes Markit manufacturing PMI and U.S. manufacturing ISM for September, as well as construction spending for August. We’ll also hear FedSpeak from Dallas Fed hawk Kaplan.

While the geopolitical rhetoric between the U.S. and North Korea is still flying, the recent absence of new DPKR missile and nuclear tests has pushed the still percolating conflict off the front page. South Korea is anticipating that fresh North Korean provocations are in the offing for this month.

Posted in Gold News, Gold Price, Gold Views, Snapshot |

S&P 500 Vs. Gold: Bloomberg Intelligence Weighs In On The Battle

KitcoNews/Sarah Benali/09-29-17

Gold and the S&P 500 are currently in a tight race.

For Bloomberg Intelligence analyst Mike McGlone, this translates into good news for the yellow metal.

“Running neck and neck with the S&P 500 in a tightening cycle should favor gold in most scenarios,” the commodities strategist wrote in a report released Friday.

… “With the record-setting stock market barely beating gold, the metal may be worthy of greater attention,” he said.

“Despite all of the attention on stocks, gold may be looking ahead to a more favorable endgame at a steep discount to historical highs with inflation brewing, a potential dollar peak and the lowest CBOE Volatility Index ever.

Posted in Gold News, Gold Price, Gold Views, Markets |

How gold takes the shine off Britain’s trade figures

SkyNews/Ed Conway/09-29-17

Doubt has been cast over one of the longest-standing economic claims in the Brexit debate after a Sky investigation revealed that Britain’s real exports to outside the EU are actually far lower than official figures suggest.

…this number is severely distorted by the flow of gold bullion in and out of London – the world’s major centre for the trade of this precious metal.

…In July alone, the latest month for which trade figures exist, gold accounted for more than a tenth of the value of everything exported by the UK overseas – making it Britain’s top export above cars, engines and pharmaceuticals.

Since the vast majority of this gold is shipped to non-EU countries such as China, Switzerland and India, the upshot of these gold figures is to swell the total amount of goods reported as being shipped outside Europe.

PG View: And it’s worth noting that much of the gold exported to Switzerland is being re-refined into kilo bars and then being sent on to . . . you guessed it, China and India . . .

Posted in Gold News, Gold Views |

The Daily Market Report: Gold is Defensive Heading into Month-End/Quarter-End, but Trend Remains Positive

USAGOLD/Peter Grant/09-29-17

Gold heads into the weekend, month-end and quarter-end on a defensive footing. In light of the last three-weeks of downticks, some short-covering could be seen ahead of today’s close.

The latest inflation data draws attention back to Janet Yellen’s speech earlier this week, where she acknowledged that she and her colleagues may have misjudged the fundamental forces driving inflation. With core PCE falling to a 2-year low in August, investors should heed the following line from that speech:

“… achieving our 2 percent inflation goal over the medium term may require a more accommodative stance of monetary policy than might otherwise be appropriate.” — Janet Yellen

Perhaps not surprisingly, December rate hike expectations have been further tempered to 73.9%, from more than 80% midweek. So the question becomes, is the Fed abandoning the 2% inflation target? If they are, they may very well hike rates before year-end. If on the other hand they remain committed to a higher level of inflation, further tightening policy — via balance sheet normalization and/or rate hikes — is the absolute wrong prescription.

The ECB is facing the same conundrum. With European inflation just 1.5% y/y in September, they have to decide whether to start tapering asset purchases ahead of year-end. “October’s meeting is likely to be one of the greatest balancing acts in the ECB’s history,” wrote analysts at ING according to the FT.

No central bank has more experience with ZIRP and QE than the BoJ. They’ve been at it for nearly two-decades and have the massive balance ¥514 trillion to prove it. The latest nationwide core CPI reading was 0.7% y/y in September.

At this point, I would think the cumulative brain-trust of central bankers would be able to conclude that their policies to specifically boost inflation have been an abject failure. I get that they can’t really admit that, although Yellen came pretty darn close this week.

If that’s the true motivation for initiating measures to normalize the balance sheets, that would at least make sense. However, I fear that such measures are going to tip the economy into recession.

Posted in Daily Market Report, Gold News, Gold Price, Gold Views |

Gold Prices Hold Support Again

KitcoNews/Todd ‘Bubba’ Horwitz/09-29-17

After making a low at $1,204 in July, gold has been in a nice uptrend, trading as high as $1,362. In the last 15 to 20 days, gold has been in a minor downtrend; however, support has held on every sell-off. On Thursday gold was tested, trading down to $1,280 only to bounce back and hold that major support level.

The action in gold suggests that the uptrend will continue. There will be attempts to sell, but the big picture looks like support should be bought. The gold trade is consistent with a market changing from the five-year bear market into a new bull market.

“[G]old looks great and is on schedule to test $1,400.” — Todd ‘Bubba’ Horwitz
Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold firms as core PCE inflation hits 2-year low

USAGOLD/Peter Grant/09-29-17

Gold is modestly firmer as the dollar continues to retrace recent gains. In the wake of yesterday’s simple hook reversal (lower low, higher close), some upside follow through would be expected as shorts take profits ahead of the weekend.

U.S. personal income rose +0.2% in August in line with expectations, tempering optimism that sprang from the +0.4% print in July. PCE rose 0.1%, also in line with expectations. Core PCE — the Fed’s favored measure of inflation — fell to 1.29% y/y, a two-year low.

The PCE data further erodes the weak inflation is “transitory” meme, bolstering Janet Yellen’s self-assessment that she and her colleagues may have “misjudged” on inflation. Today’s data should temper December rate hike expectations, helping gold.

Posted in Gold News, Gold Price, Gold Views, Snapshot |

Gold settles modestly higher after touching lowest levels since mid-August

MarketWatch/Myra P. Saefong/09-28-17

Gold prices end higher Thursday, edging up after notching a six-week low as the U.S. dollar retreated from its highest level in a month. “Futures and options traders may be running scared of the [Federal Reserve’s] sudden claim of getting sober and preparing to raise rates, but private investors in physical gold don’t believe it,” said Adrian Ash, head of research at BullionVault. “They’re using this price drop to rebuild positions after taking profits over the summer,” he said.

Posted in Gold News, Gold Price, Gold Views |

The Daily Market Report: Gold Stabilizes Above 5-Week Lows

USAGOLD/Peter Grant/09-28-17

Gold is trading modestly higher after dipping to new 5-week lows in overseas trading. The yellow metal has caught a bit of a bid as the dollar retreats from its recent 6-week high and December rate hike expectations edge lower.

Fed funds futures now show December rate hike probability of 76%, down from 81% yesterday. Nonetheless, FedSpeak today continues to tow the ‘gradual rate hikes are appropriate’ party line.

Stanley Fischer, on his way out the door essentially, said the importance of reversing temporary policy stimulus measures should not be “underestimated.” Realize that those “temporary” measures have been ongoing for about a decade. Rates will remain well below what was previously considered normal and the balance sheet will remain massive for some time to come, even if the normalization goes off exactly as planned.

Maybe investors are re-reading Janet Yellen’s speech from earlier in the week and realizing it’s not as hawkish as their initial interpretation. Yellen admits that her and her colleagues may have been “misjudged” the labor market and inflation. One traders said it was an admission that the Fed is clueless!

In the very same speech, she said that gradual rate hikes remains appropriate, but also said “achieving our 2 percent inflation goal over the medium term may require a more accommodative stance of monetary policy.” Which is it? Because it can’t be both . . .

“QE didn’t work, and Janet knew it was unlikely to work, from the start,” said John Mauldin in his introduction to an article entitled Low Inflation Is No “Mystery”

So forgive us for asking, but after unprecedented expansion of banking reserves and the Fed balance sheet, with little inflation, is it really a “mystery?” Or, is it proof of what we believed all along: QE didn’t work? — Brian S. Wesbury & Robert Stein of First Trust

It seems to me that forging down the same policy path that has failed to yield the desired results is ill-advised. That goes for the start of QE and it will likely to be true for the unwind of QE as well. Damned if you do and damned if you don’t.

Geopolitical tensions seem to have eased somewhat as China ramped-up pressure on North Korea. All North Korean firms and joint ventures in China must close within the next several months.

With even their closest ally aligning with the U.S. and dialing up the santions, the hope is that the DPRK will back down. Whether they do or not, remains to be seen and South Korea is still expecting more missile tests and perhaps another nuclear test in October.


Posted in Daily Market Report, Gold News, Gold Price, Gold Views |

Trump tax plan pushes gold to 6-week low

Reuters/Peter Hobson/09-28-17

Gold touched its lowest in six weeks on Thursday after the dollar and U.S. bond yields rose on proposed U.S. tax reforms and strong economic data that supported the case for another U.S. interest rate hike this year.

U.S. stocks rose and the dollar touched its highest level since mid-August before slipping as markets bet President Donald Trump’s tax-cutting plan could accelerate economic growth.

Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold stabilizes, but remains defensive

USAGOLD/Peter Grant/09-28-17

Gold extended to the downside in overseas trading before stabilizing near unchanged. The dollar has eased somewhat after eking out a 6-week high in earlier trading, helping to buoy gold.

U.S. Q2 GDP (3rd report) was revised up to 3.1%, in line with expectations, versus 3.0% previously and 1.2% in Q1. The U.S. advanced goods trade gap narrowed to -$62.9 bln in August. U.S. initial jobless claims rose 12k to 272k last week, above expectations of 268k.

Later this morning we’ll get August agriculture prices and M2 for the week ended 18-Sep. FedSpeak is due from George, Fischer and Bostic.

China has ordered that all North Korea connected business be shut down within 120-days. This forceful move by the DPKR’s closest ally may move the ball on a diplomatic solution. However, more provocative actions by North Korea are still anticipated, which is an underpinning of the gold market.

Posted in Gold News, Gold Price, Gold Views, Snapshot |

Gold marks fresh September low as dollar gains

MarketWatch/Myra P. Saefong & Rachel Koning Beals/09-27-17

Gold fell for a second session Wednesday as stocks and the dollar moved higher and traders watched the rollout of a Republican plan to overhaul the U.S. tax code.

PG View: Stocks love the proposed corporate tax cut, whetting risk appetite. However, whether or not the GOP can move the ball on this remains to be seen.

Posted in Gold News, Gold Price, Gold Views |

The Daily Market Report: Gold Pressured as Market Adjusts to Rate Hike Expectations

USAGOLD/Peter Grant/09-27-17

Gold extended to the downside in early, establishing new 5-week lows as the dollar continued to rebound amid heightened rate hike expectations for December. The yellow metal subsequently garnered some support after more disappointing housing market data.

U.S. NAR pending home sales sank 2.6% in August. Low supplies have sapped momentum from the market and the NAR’s chief economist concedes that the the housing market has essentially stalled. Housing makes up nearly a fifth of GDP, but drives an even larger segment of consumption (think furniture, appliances, law care products etc.).

If Janet Yellen really believes gradual rate hikes are still appropriate, think about the implications for the already slowing housing market. Higher mortgage rates, higher carry rates on construction and bridges loans are unlikely to reinvigorate this critical segment of the economy. Such policy is also unlikely to stoke the inflation that the Fed so desperately wants.

Currently the market believes the odds for a December rate hike are about 80%, based on Yellen’s comments yesterday. However, the Fed is still very much data dependent and I imagine the probability will be pared in the weeks ahead if incoming data disappoint.

If that is indeed how things unfold, the dominant downtrend in the dollar should re-exert itself, providing support for gold in the process. Certainly any escalation of the tensions with North Korea will provide an underpinning for the yellow metal as well.

Posted in all posts, Daily Market Report, Gold News, Gold Price, Gold Views |

Gold edges down as dollar gains on Fed rate hike view

Reuters/Nithin ThomasPrasad/09-27-17

Gold inched lower on Wednesday, weighed down by a stronger dollar amid prospects for a December interest rate hike in the United States and ahead of the unveiling of a tax plan by Donald Trump’s administration.

…In the previous session, prices fell 1.3 percent in their biggest loss in over two weeks following comments by U.S. Federal Reserve Chair Janet Yellen that the central bank needed to continue gradual rate hikes despite broad uncertainty about the path of inflation

Posted in Gold News, Gold Price, Gold Views |

Morning Snapshot: Gold remains under pressure as yields, dollar rise

USAGOLD/Peter Grant/09-27-17

Gold remains defensive in the face of a rising dollar and the rising belief that the Fed will hike rates in December, regardless of weak inflation and growth risks. The yellow metal is slipped to new 4-week lows below 1287.50.

Fed Chair Yellen said yesterday that gradual rate hikes remain appropriate, despite misjudgements on the labor market and inflation. While she opened the door for a possible reversal of course, the market ignored that and prospects for a December rate hike jumped. Yields and the dollar rose as well, putting gold under pressure.

Todd ‘Bubba’ Horwitz, writing for KitcoNews, contends that Yellen essentially admitted that the Fed is “clueless”.

The real story is simple — all markets are on edge and looking to make big moves in one direction or the other. Looking into my crystal ball, I would expect equities, bonds, the euro currency and oil to break to the downside while gold, the U.S. dollar and commodities go higher. — Todd ‘Bubba’ Horwitz

U.S. durable goods order rebounded more than expected in August, although the overall trend remains troubling. The August pending home sales index and EIA crude data for last week are out later this morning. We’ll also hear FedSpeak from Bullard, Brainard and Rosengren.

Posted in Gold News, Gold Price, Gold Views, Snapshot |