Fewer rate hikes may support gold

14 September, 2018

The Gold price has continued to rally today after yesterday’s release of consumer price index figures from the US threw into doubt the ability for the US Federal Reserve to lift interest rates much higher from current levels.

Data out from the bureau U.S. consumer prices increased by a seasonally adjusted 0.2% during August which was below expectations and comes on the back of Wednesday’s producer price Index figures which also hit the market below expectations.

The news is not expected to derail plans for the Fed to go ahead and raise interest rates this month but the chances of a follow up rate hike in `December have now fallen.

"With the data falling short of expectations, investors are thinking that the Fed might not go for a rate hike in December, even though a hike in September is definite," said Ji Ming, chief analyst at Shandong Gold Group.

The key to gold’s near tem fortunes is the ability to stay above the physiological $1,200 level and if this is maintained we may see the precious metal push higher and especially if any more negative data comes out of the US which will further damper expectations for more rate hikes.

"If prices stay around $1,200 levels, it means the markets are still positive. People who shorted below could come and cover, driving prices to $1,250," said Hidetaka Namiki, chief executive at Asset Management firm Bullionist Capital.

"By looking at the weakness in emerging market currencies and equities being overbought, people are just waiting for the turnaround in gold" he added.


Source link  
Pound may suffer in the long term

The British pound continues to power ahead in today's trading session after yesterday's developments in the British parliament that many see as ending...

Gold needs to remain above $1300

The gold price has staged a substantial rally since last week after the US Federal Reserve latest board meeting where they stated that any move...

Only way for oil is down

The oil price has now broken down through the all important $50 mark, which is a physiological blow to any chance of a rally, and according to...


D-Day for the pound

Traders and Fund managers alike are expected to be glued to their desk on Tuesday evening UK time as the British parliament vote on the Brexit Deal put before them...

Will gold's rally continue?

After spending the majority of November range bound, the gold price has finally broken out to the upside as investors seek out safe havens from the anticipated...

Dollar could weaken for years

The US dollar has been the star performer in the currency markets this year, gaining solidly against all the major currency but some are beginning...


Gold may finally Breakout

Gold is now on track to rack up its 5th straight day of gains on the back of geo political factors as well as expectations the US Federal Reserve may...

Will gold continue rally?

For more than 2 weeks now, the gold price has been on a steady uptrend after volatility in world stock markets, and in particular, the US market which...

Pound may be headed for parity

The market had been expecting such a move so all eyes were on the following monetary statement for signs of the US central bank's future moves...

  


Share: