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Upcoming Chinese New Year Seen Supporting Gold Prices

Yet another major holiday in the not-too-distant future may provide support to gold prices, analysts say. “The gold price could soon be given a boost by purchases in China in the run-up to the Chinese New Year festival, which will be celebrated this year at the end of January,” Commerzbank says. “That said, Chinese gold demand was still unusually subdued in November.” Sam Laughlin, precious-metals trader with MKS (Switzerland) S.A., adds: “Chinese New Year demand is expected to support the metal over the short term, with key support sitting toward $1,142, while consolidation above $1,160 will be required for a run higher.”

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

 

BNP Paribas: U.S. Data, FOMC Minutes Likely To Support Dollar This Week

Tuesday January 03, 2017 08:14

BNP Paribas looks for U.S. economic data and minutes of the last meeting of the Federal Open Market Committee to support the U.S. dollar over the next few days. “This week in the U.S., focus will be on the December employment report, minutes from the FOMC’s December meeting and both ISM (Institute for Supply Management) surveys,” BNP Paribas says. “Our economists think that the Fed’s minutes will show a hawkish tilt, with the focus on why the median ‘dot’ of expectations of the appropriate Fed funds rate in 2017 moved up to three (hikes) from two and a discussion around the effects of fiscal policy and higher inflation expectations.” Meanwhile, BNP Paribas forecasts an increase of 170,000 jobs in the U.S. last month, which the bank says is above the upper end of the Fed’s estimated threshold of job gains needed to keep the employment rate steady. Further, the ISM manufacturing survey due out Tuesday and the non-manufacturing survey Thursday are “likely to continue to show anticipation of better economic conditions post-U.S. election,” BNP Paribas says. “The market starts 2017 pricing in 55bp (55 basis points) worth of Fed tightening over the next 12 months. While our central scenario is that U.S. data this week will support Fed pricing further still, the risk is to the downside given how much is already priced.”

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

 

 

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