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A Drop Below $1,400 In Gold Could Signal Correction: MKS PAMP GROUP

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If gold prices drop below the $1,400 an ounce level, the metal is going into correction territory, MKS PAMP GROUP writes. “Key supportive interest for the metal sits broadly through USD $1,400 - $1,395, while any extension underneath this would indicate the metal is correcting, with down-side targets through to USD $1,350 - $1,335,” MKS states. Some “modest” interest out of China during the Asian session on Monday is now offset by late afternoon offers out of Europe, which are not weighing on gold prices, MKS adds. “The precious complex extended weakness during Asian trade today, as market participants continued to digest the ‘hawkish’ cut by the U.S. Federal Reserve on Wednesday. The greenback opened firmer as did U.S. treasuries to further weigh upon gold during Asian hours, driving bullion underneath USD $1,410 in early session flows.” 

By Anna Golubova of Kitco News; agolubova@kitco.com

 

Gold To Remain Supported Despite Powell’s 'Mid-Cycle Cut' Comment - TD Securities  

Thursday August 1, 2019 09:11

The market’s withdrawal of aggressive easing expectations when it comes to the Federal Reserve is paring back demand for gold and silver, according to strategists at TD Securities.  “The Fed Chair's conscious decision to communicate that yesterday's interest rate cut represented a ‘mid-cycle cut’ — that is to say not the ‘beginning of a long series of cuts’ — has seen demand for precious metals ebb as aggressive easing bets are paired back,” the strategists write. However, gold is likely to remain supported, they added. “Our rates strategists noted that historically, the first Fed cut is often initially referred as an insurance cut … In other words, once a cut is priced-in, the market has its way more often than not — suggesting that gold could still remain supported … Momentum indicators in gold continue to fire upside signals on all cylinders.”

By Anna Golubova of Kitco News; agolubova@kitco.com

 

U.S. Dollar Rally To Continue: BBH

Thursday August 1, 2019 09:11

The U.S. dollar index is hitting new highs for the year following the Federal Reserve’s less dovish than anticipated cut, says BBH Global Currency Strategy. “DXY is trading at new highs for this year near 98.932. The next target is the May 2017 high near 99.888. Still, the FX moves seen so far have not been very large and this supports our view that a greater adjustment in U.S. rates is needed to keep this dollar rally going,” BBH writes. 

By Anna Golubova of Kitco News; agolubova@kitco.com

 

Gold, Silver Stuck Dealing With Ramifications Of Powell’s Presser: INTL FCStone 

Thursday August 1, 2019 09:11

For the rest of the week the precious metals market will be dealing with “ramifications” of the Federal Reserve Chair Jerome Powell’s press conference, says INTL FCStone commodities consultant Edward Meir. “Gold is at $1417, down $20/ounce, but pretty much where it was after yesterday’s Fed announcement, but silver is at $15.99, off $.41 cents and adding $.13 cents to yesterday's losses,” Meir writes. Powell’s reference to “midcycle adjustment” and not a start of a series of cuts is key, states Meir. “Powell made it clear that the move was taken more as insurance against a trio of troubling factors, namely, growing trade uncertainties, weakness in overseas markets and low inflation.”

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