The bears got a break this week as increasing cautiousness about Gold is rising amongst investors before the Federal Reserve policy announcements. There is going to be a decision about the rate hike and even more, importantly Economic Projections report can significantly increase the risk.
If we take a look at the medium-term chart, then we can see the slump that Gold had started to slow down, with bullion trading in the range of $1,312 – $1,325 starting from this week. Traders end their pessimistic wagers on the precious metals as they worry that the FED might take a dovish stance, because of the Brexit-related recession risks have not yet manifested in full. On the other hand, they could count on the positive economic data coming from the US.
Volatility on the EUR/USD and the GBP/USD fell flat on Wednesday as both pairs stick around 1.31 and 1.10 levels respectively. The UK GDP growth in the second quarter by 0.6%, beat the forecasts but failed to support the pound as it came prior to the UK referendum, thus giving no information about the Brexit impact. The US Consumer Confidence rose to 97.3 points in July topping estimates of 96.0 points, which added optimism regarding the expansions of the US economy.
Traders reduced their bullish bets on crude as there are clear signs of slowing demand but growing production. WTI fell by 0.54% to 42.69, Brent decreased by 0.95% to 44.80 level.
USD/JPY regained 1.10% after dipping to a 104 level as Japanese local media reported, how the meager size of the stimulus could frustrate investors. The sudden lift was caused by news that BoJ will announce the size of stimulus package today, which can reach up to $250B.Publication source