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POPULAR NEWS
Gold Edges Higher, But Faces Worst Week in Two Months

Gold prices edged higher on Friday, but was still on track to post its biggest weekly decline in about two months as solid Chinese data and a preliminary U.S.-China trade deal improved risk appetite. World shares hit record highs after data showed China's economy was stabilizing and the world's second-largest economy ended 2019 on a somewhat firmer note as the trade truce revived business confidence. Spot gold rose 0.3% to $1,556.56 per ounce, but was heading for a weekly drop of about 0.4%...

Gold futures end higher for the session, barely changed for the week

Gold futures settled higher on Friday, but barely budged for the week. "Gold has struggled to shine this week as positive economic data from the United States and China cooled concerns over the global economy," said Lukman Otunuga, senior research analyst at FXTM. "Appetite towards the metal was also bruised by the 'phase one' [U.S.-China] deal, which offered some light at the end of the long trade war tunnel. With stock markets hitting record highs and the dollar stabilizing, gold is...

Oil Near $59 as Trade Deal Hopes Jostle With Ample Supply

Oil was near $59 a barrel in New York after rising the most in almost two weeks as the U.S. and China signed a trade agreement, though remains capped by signs that supplies remain plentiful. Futures gained 0.5%, having increased 1.2% on Thursday as Washington and Beijing™s phase-one deal commits China to $52.4 billion in additional purchases of American energy over 2020 and 2021. Still, there was some skepticism about whether such as target is feasible, particularly if it leaves...

Gold Firm But Hemmed in Tight Range; Set For Worst Week in 2 Months

Gold prices edged higher on Friday but traded in a tight range as investors stayed on the sidelines in the absence of news  catalysts. The metal, however, was on track to post its biggest weekly drop in two months, as a long awaited U.S.-China Phase 1 trade deal fueled risk appetite. Spot gold rose 0.2% to $1,555.14 per ounce by 06:02 GMT, heading for a weekly drop of 0.4% ” its biggest since the week ended Nov. 8. U.S. gold futures rose 0.4% to $1,556.90. Source : CNBC

Pound Stumbles After Weaker-Than-Expected U.K. Retail Sales Data

The British pound fell Friday after data showed U.K. retail sales falling by 0.6% in December versus the previous month, adding to a picture of a weak economy that may need interest rate cuts to stimulate growth. In the three months to December 2019, sales fell 1% against the prior three months. The pound fell 0.2% to $1.3052, from a level of around $1.31 seen just ahead of the data. Source : Marketwatch

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What happens to the gold price when Fed cuts rates this week?
Monday, 28 October 2019 11:28 WIB | GOLD CORNER |Gold CornerGold Outlook

With the Federal Reserve rate cut already priced in for this week, what will actually happen to the gold price once the central bank cuts for the third time this year?

Analysts sounded positive as gold's new technical momentum took prices temporarily to $1,520 an ounce, hitting a two-week high. Since then, prices retreated, but not below the key psychological $1,500 an ounce level.

"You have demand now from momentum traders. We have options expirations on Monday on the Comex. I talk about the fact that price makes the news. Prices got the attention of global traders. We are going to lose a lot of open interest from short-covering," RBC Wealth Management managing director George Gero told Kitco News on Friday.

Chart-based buying was giving prices a boost, Kitco's senior technical analyst Jim Wyckoff pointed out. "Both gold and silver have seen their near-term technical postures improve markedly last week--near-term price downtrends on the daily charts were negated, which is inviting chart-based buyers into the markets," Wyckoff said.

Also, weaker economic data has helped gold move above $1,500 an ounce as traders were starting to price in more cuts as they worried about slower economic growth.

"We bounced off $1,480 level, which has been a bit the support recently. We continue to see weaker economic data from the U.S. in particular and that has helped strengthen the case for a cut this week," said TD Securities commodity strategist Ryan McKay.

Blue Line Futures president Bill Baruch described last Friday's move up as very technical in nature.

"The market could not go lower. The profile was exhausted to the downside and the bears could not do anything. We are seeing moves above technical levels that are gathering additional tailwinds," Baruch said. "I've been upbeat on longer-term gold. Earlier this week, we've gone bullish in the near-term as well.

It is advisable to get a bit more defensive in your portfolio, said RJO Futures senior market strategist Phillip Streible.

"Fresh weak economic data is really increasing expectations that the Fed is going to do that cut this week. Weaker durable goods versus expectations for the second month in a row got traders scratching their heads about the health of the economy," Streible said. "We also saw weaker data come out of tech stocks, which is a big growth sector. Those kinds of concerns really got people slightly worried.

Now, many are eyeing the $1,525 level as the key resistance that the yellow metal needs to break to move significantly higher.

"Gold has to get above $1,525 and then we can clear the way. If we can close the month anywhere near $1,550, those expectations of the $1,600 year-end target actually have a chance," Streible said.

The Fed might disappoint with a more hawkish tone

The Federal Reserve announcement on Wednesday is the key event to watch this week, according to analysts, who are cautious that the market might be expecting an unrealistically dovish tone from the central bank's Chair Jerome Powell.

"In the last couple days ” the hawkish Pence speech and the weaker U.S. data ” markets are getting more convinced that Powell will strike a dovish tone at the next meeting," said McKay. "But, this might be a little premature. We are skeptical that Powell is going to signal more cuts after a cut this week. The Fed is likely to put rate cuts on pause for at least near-term to assess the impact of the potential three cuts they do this year."

Lack of dovishness from Powell could weigh on gold this week as markets are disappointed, McKay added.

Also, the Fed's rate cut has largely been priced in by the gold market, which means any hawkish hints could push gold lower, Baruch pointed out.

"What matters is the narrative they speak of and how they plan on moving forward. So it's not so much the cut but future cuts. Will they be as dovish as the markets are anticipating?" he Baruch. "Also, don™t underestimate Brexit and the U.S.-China talks."

At the time of writing, the markets were estimating a 93.5% chance of a 25-basis-point cut, according to the CME FedWatch Tool.

Data to watch this week

Some key macro releases this week include Friday's U.S. employment report, which is estimated to show that an additional 90,000 jobs have been created in October.

Another important dataset will be the preliminary Q3 GDP figure on Wednesday, which is projected to come in at 1.7%.

Other items to keep a close eye on are CB consumer confidence report and U.S. pending home sales on Tuesday, as well as, personal spending on Thursday and ISM manufacturing PMI on Friday.

Source: Kitco News

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POPULAR NEWS
Gold Edges Higher, But Faces Worst Week in Two Months

Gold prices edged higher on Friday, but was still on track to post its biggest weekly decline in about two months as solid Chinese data and a preliminary U.S.-China trade deal improved risk appetite. World shares hit record highs after data showed China's economy was stabilizing and the world's second-largest economy ended 2019 on a somewhat firmer note as the trade truce revived business confidence. Spot gold rose 0.3% to $1,556.56 per ounce, but was heading for a weekly drop of about 0.4%...

Gold futures end higher for the session, barely changed for the week

Gold futures settled higher on Friday, but barely budged for the week. "Gold has struggled to shine this week as positive economic data from the United States and China cooled concerns over the global economy," said Lukman Otunuga, senior research analyst at FXTM. "Appetite towards the metal was also bruised by the 'phase one' [U.S.-China] deal, which offered some light at the end of the long trade war tunnel. With stock markets hitting record highs and the dollar stabilizing, gold is...

Oil Near $59 as Trade Deal Hopes Jostle With Ample Supply

Oil was near $59 a barrel in New York after rising the most in almost two weeks as the U.S. and China signed a trade agreement, though remains capped by signs that supplies remain plentiful. Futures gained 0.5%, having increased 1.2% on Thursday as Washington and Beijing™s phase-one deal commits China to $52.4 billion in additional purchases of American energy over 2020 and 2021. Still, there was some skepticism about whether such as target is feasible, particularly if it leaves...

Gold Firm But Hemmed in Tight Range; Set For Worst Week in 2 Months

Gold prices edged higher on Friday but traded in a tight range as investors stayed on the sidelines in the absence of news  catalysts. The metal, however, was on track to post its biggest weekly drop in two months, as a long awaited U.S.-China Phase 1 trade deal fueled risk appetite. Spot gold rose 0.2% to $1,555.14 per ounce by 06:02 GMT, heading for a weekly drop of 0.4% ” its biggest since the week ended Nov. 8. U.S. gold futures rose 0.4% to $1,556.90. Source : CNBC

Pound Stumbles After Weaker-Than-Expected U.K. Retail Sales Data

The British pound fell Friday after data showed U.K. retail sales falling by 0.6% in December versus the previous month, adding to a picture of a weak economy that may need interest rate cuts to stimulate growth. In the three months to December 2019, sales fell 1% against the prior three months. The pound fell 0.2% to $1.3052, from a level of around $1.31 seen just ahead of the data. Source : Marketwatch

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