Market Nuggets
FXTM: Disappointing Corporate Earnings Would Support Gold
Gold could “shine with intensity” this week if U.S. corporate earnings turn out disappointing and the “tired” U.S. dollar depreciates, said Lukman Otunuga, research analyst at FXTM. “Appetite for the yellow metal remains supported by expectations of a U.S. rate cut this month, a timid dollar and ongoing concerns over slowing global growth,” the analyst said. “For as long as these core themes weigh on global sentiment, bulls remain in a position of power.” Based on the technical charts, Otunuga said, “an intraday breakout above $1,419 should signal a move higher towards $1,430 in the short to medium term.” As of 7:46 a.m. EDT, spot gold was $1 higher to $1,414.60 an ounce.
By Allen Sykora of Kitco News; asykora@kitco.com
Commerzbank: Gold Market Awaits Data, Speeches
Tuesday July 16, 2019 07:51
The gold market is awaiting U.S. economic data and appearances by Federal Reserve policymakers as traders try to gauge what happens next to U.S. monetary policy, said Commerzbank. “Ahead of the publication of U.S. economic data and speeches by various Fed officials, gold remains unchanged and is trading at $1,415 per troy ounce,” the bank said. “Market participants are trying to get a sense of whether the U.S. Federal Reserve will lower interest rates by 25 or even by 50 basis points at the end of the month. If the Fed opts for a ‘small’ rate cut, others are likely to follow later in the year. By contrast, a ‘big’ cut is likely to be a one-off step.” The main U.S. reports due out Tuesday are retail sales and industrial production, while Fed Chair Jerome Powell is among the speakers.
By Allen Sykora of Kitco News; asykora@kitco.com
BBH: U.S. Yield Curve Signals Less Chance Of Recession
Tuesday July 16, 2019 07:51
The three-month to 10-year U.S. Treasury yield curve is back positive territory, signaling a reduced chance of a recession, said Brown Brothers Harriman. The curve was at plus 2 basis points as of a BBH research note. Analysts said that “the slope is positive for the first time since May 22 and suggests recession risks have receded somewhat. While the slope is likely to oscillate between negative and positive near term, an improved U.S outlook should keep it largely out of inverted territory over the longer term.”
