Opinion with Peter Hug
Gold Treading Water Ahead Of Next Week's Fed Meeting
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - Gold is likely to continue trading in its recent range into the Fed meeting next week. It appears that the administration has softened the blow of the tariff threat by imposing initial tariffs of 10%, with the possibility of an additional 15% in 2019. The 10% bump has mostly been offset by the weakness in the Chinese yuan over the past few months and as such should have a small impact on the Chinese economy. Traders are beginning to assess the inflation impact on the U.S. economy where these tariffs will create higher prices at the retail level, albeit it may take months before this feeds down to the consumer level. The focus will be on the Fed where traders will focus on the comments for indications of future rate-hike guidance. We may again get a stab at the lower support band for gold at $1,193 before the meeting but would consider this an entry point for traders that have remained on the sidelines. Risk remains with the bears. The PGMs have shown some recent life. Platinum has moved up $40 relative to gold. Palladium has again regained the $1,000 level and rhodium has quietly continued its march higher, now north of $2,400.