Gold plunges after a day of rallying
4 November, 2016
Gold fell steep, in the middle of the Asian session as investors reassessed the odds of a November tightening after theВВ FED supplied them with fresh cues of its next policy steps. According to the statement of policymakers, the Federal Reserves need “some” other evidence to support the rate hike cases. Possibly the outcome of US Elections, which is extremely important for markets. As theВВ FBI probe torments Clintons campaign, pulling her ratings down, Trump is gaining attention and taking a lead among the voters.
After Wednesday upsurgeВВ over $1,300 per troy ounce, bullion retreats to $1,286 on Thursday. The Greenback was subdued near the 97.00 level as theВВ currency index retreated to a ВВ 97.30 level, stalling near Wednesdays close. The wide volatility that was seen recently indicates how uncertain the markets are about theВВ Elections outcomeВВ trying to find their best R/R ahead of the event.
The Pound surged to a 1.24700 levelВВ on the BoE decision to leave the rates unchanged at 0.25% with all 9 members voting for a “no-change”. The asset purchase target remainedВВ unrevised at 435B pounds. Starlings growth was also fuelled by the decision of the Supreme Court to rule theUK government.ВВ They will need to obtain the parliament’s agreement in order to trigger the Article 50, which is necessary for the initiating formal Brexit process. Now, as the court created new obstacles for May’s government to finish the breakup with EU, markets have delayed the reassess of the potential Brexit fallout, rising the Pounds value.
The UK Service PMI report released todayВВ showed the accelerated business activity of the sector in October.ВВ The headline figure started at 54.5 falling to 52.6 in September. Composite PMI came also above forecasts at 54.8, 1.3 points higher than projected.
The Australian Dollar saw the limited responseВВ to the Performance of Service index report, which came above expectations at 50.5 vs 48.9 previous reading, AUD/USD trades 0.1% higher at 0.7668.
The crude prices advanced after sliding from above $50 to $45 levelВВ indicating the lowered expectations of OPEC output cuts and a record increase in US stockpiles shown in the API and EIA reports.
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