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Commerzbank: Gold To Focus On Central Banks, Jobs Data

Kitco News

All eyes in the gold market will be on meetings of the Federal Open Market Committee and other central banks this week, as well as the monthly U.S. jobs report on Friday, says Commerzbank. Fed rate hikes or hawkish commentary, as well as strong jobs data, tend to undercut gold, and vice-versa. However, rate hikes in other nations could help gold by hurting the U.S. dollar. “Market participants are likely to be focusing on the Fed meeting this week, though we do not expect a rate hike this time. This is likely to happen at the next meeting in September,” Commerzbank says. “The meetings of the Bank of Japan (tomorrow) and of the Bank of England (Thursday) could also be of interest. What is more, the U.S. labor market report on Friday will be relevant to the gold price.”

By Allen Sykora of Kitco News; asykora@kitco.com

 

BBH: FOMC Likely To 'Stand Pat' On Rates, Statement

Monday July 30, 2018 08:58

The Federal Open Market Committee likely “will stand pat” on interest rates and not issue any new wording in its communiqué this week that would “undermine expectations for continued gradual normalization of policy,” says Brown Brothers Harriman. A two-day meeting starts Tuesday, with a policy statement due out Wednesday afternoon. “Indeed, the statement itself needs only minor adjustments,” BBH says. “The general assessment of the economy it provided in June won't have to be tweaked much to keep it relevant.  Its judgment that the risks to the outlook of roughly balanced will likely be retained.” BBH adds that policymakers may acknowledge some risk to the economy from rising trade tensions.  “Since the FOMC will wait until the late-September meeting to hike rates again, when there will be updated forecasts and a press conference, there is little to dissent about,” BBH says. “However, there is some precedent for dissents from a regional president over an economic characterization.  Atlanta Fed's [Raphael] Bostic, who appears to be the most concerned among voting FOMC members of the risk of an inverted curve, could be such a potential candidate. “

By Allen Sykora of Kitco News; asykora@kitco.com

 

TDS: Fed May Be 'Least Interesting' Central-Bank Story Of The Week

Monday July 30, 2018 08:58

Several Group of Seven central banks meet this week, and the U.S. Federal Open Market Committee may not necessarily be the most newsworthy one for markets, says TD Securities. Traders will be watching to see which banks are hawkish, as that influences the U.S. dollar and thus gold. Bank of Japan, Bank of England and Fed policymakers all meet. “For once the Fed could be the least interesting story of the week as the market hones in on the BOJ and the BOE,” TDS says. “We don't think the BOJ will deliver any meaningful policy shifts, though the policy cat is out of the bag and the next move for the BOJ is less rather than more stimulus …. The BOE is expected to deliver a rate hike, though GBP [the British pound] will have to contend with Brexit headlines and broader USD [U.S. dollar] trends. We think the USD has reached peak optimism, leaving GBP some room to benefit from the hike, especially as valuations look clean.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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