Gold futures once again were on pace to finish in negative territory with investors preferring the sidelines during the start of a pivotal US monetary meeting.
Gold for December settlement on the Comex division of the New York Mercantile Exchange dipped $5.0 or 0.4 percent to $1,324.70 per ounce. The contract is trading around a one-month low and support lies at $1,300 per ounce.
Central bankers are currently in Jackson Hole, Wyoming, for the Federal Reserve’s annual two-day symposium and are anticipating chair Janet Yellen’s speech tomorrow morning.
Various Fed members have issued relatively hawkish assessments of the US economy moving into the fall, despite poor consumer and retail data. Still, prediction markets only ascribing a one-in-five chance of a September move and don’t anticipate an increase to the Federal Funds rate till 2017.
“Chair Yellen is widely expected to settle the matter of a September rate increase, as well as set a more clear expectation for the possibility of a rate hike by the end of the year,” Lindsey M. Piegza, Chief Economist at Stifel, said. “We continue to expect the Chair to leave the door open on a 2016 rate hike, while more heavily emphasizing the need for additional rate hikes in 2017 and beyond.”
Investment inflows into the exchange-traded funds (ETFs) tracked by FastMarkets have slowed in recent days – only 1.14 tonnes were added to holdings overnight, bringing the total to 2,116 tonnes. Investors are awaiting the conclusion of the Fed meeting before taking a position.
Lingering fears over the health of the eurozone following the UK’s vote to exit and persistent questions over the monetary strategies of Japan and China are preventing a major sell-off in the interim.
“Gold has been trading sideways for the past two months with the range continuing to decline,” Ole Hansen, Head of commodity strategy at Saxo Bank, said. “Fundamentals support further upside but investment flows could indicate a deeper correction may be needed in the short term.”
In a busy US data day, jobless claims ending the week of August 19 came in at 261,000, below the 265,000 forecast and more importantly, under the psychological 300,000 mark.
Durable goods orders in July gained 4.4 percent, besting expectations of a 3.4 percent rise. Core curable goods orders – excludes transportation equipment – over the same time period ticked up 1.5 percent, also above the 0.4 percent estimate.
Turning to US markets, the Dow Jones industrial average and S&P were down 0.1 percent and 0.2 percent respectively, while the dollar softened 0.2 percent to $1.1280 against the euro.
As for other precious metals, Comex silver for September delivery slipped 5.1 cents or 0.3 percent to $18.505 per ounce. Trade has ranged from $18.440 to $18.620.
Platinum for October settlement fell $5.50 or 0.5 percent to $1,076.70 per ounce, while the most active palladium contract stood at $685.00 per ounce, up $2.50.
(Editing by xxx)
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Source: Bullion Desk News
