Saturday, 24 August 2019
Jakarta
--:--
Tokyo
--:--
Hongkong
--:--
New York
--:--

Wall St., Main St.: Gold To Shine During FOMC Week
Monday, 29 July 2019 14:29 WIB | GOLD CORNER |Gold OutlookGold Corner

Wall Street and Main Street both look for gold prices to climb this week, with the Federal Open Market Committee widely expected to cut U.S. interest rates, according to the weekly Kitco News gold survey.

Wall Street respondents cited a dovish Fed, technical-chart momentum in gold and the ability of the market to attract buying interest from fund managers on any price dips. However, many Wall Street respondents either look for either lower prices - saying a rate cut is already factored into the market, thus profit-taking may occur when the actual news occurs - or are neutral heading into what could be a volatile week for prices.

One key will be whether policymakers cut rates by 25 or 50 basis points, with the larger reduction more likely to result in price gains, observers said.

Sixteen market professionals took part in the Wall Street survey. A total of eight voters, or 50%, called for gold to be higher. There were three votes, or 19%, for lower, while five respondents, or 31%, look for the metal to be sideways or were neutral.

Meanwhile, 953 respondents took part in an online Main Street poll. A total of 580 voters, or 61%, called for gold to rise. Another 223, or 23%, predicted gold would fall. The remaining 150 voters, or 16%, saw a sideways market.

In the last survey, Main Street and Wall Street were both bullish on prices for the last week was winding down. Just before 11 a.m. EDT, Comex August gold futures were trading $6.60 lower for the week so far at $1,420.10 an ounce.

Wall Street and Main Street both have a 15-13 winning record for the year to date, meaning respondents have been right 54% of the time.

"The lustrous metal finds broad support for its rally upwards with U.S.-China trade tensions unresolved, the possibility of a hard Brexit on the horizon, easing Central Bank policies and slowdown in global growth," said Richard Baker, editor of the Eureka Miner's Report.

He commented that second-quarter U.S. economic growth, reported last Friday at 2.1%, is below the first quarter and will likely not deter the Federal Reserve policymakers from a signaled rate cut.

"The ECB [European Central Bank] didn't cut rates last week but President Mario Draghi announced a dovish stance going forward," Baker said. "This keeps the opportunity costs for holding gold low; the 10-year real rate is 0.28% against a background of negative rates abroad. There has also been a modestly bullish uptick in inflation expectations since the low of mid-June (up 19 bps to date)."

Daniel Pavilonis, senior commodities broker with RJO Futures, looks for a flight to quality into gold. Pavilonis and Sean Lusk, co-director of commercial hedging with Walsh Trading, both commented that buying interest seems to emerge on any price pullbacks lately.

"I think the market moves higher into the Fed," Lusk said, but adding that some consolidation may well occur afterward. He also commented that markets continue to worry that the trade war will cut into global economic growth, thereby helping gold.

Phil Flynn, senior market analyst with at Price Futures Group, looks for gold to build on the gains made this summer.

"Even though Mario Draghi seemed to disappoint gold by not acting immediately to cut rates, the path is still accommodative and still bullish for gold," Flynn said. "The Fed anticipation should help gold prices this week. Gold is still in breakout mode."

Jim Wyckoff, senior technical analyst with Kitco News, said gold™s technical-chart picture remains bullish.

Meanwhile, Adam Button, managing director of ForexLive, is among those who look for gold prices to move lower this week.

"I expect the Fed to cut 25 bps and offer few clear signals about what's coming next. The reaction will be similar to the post-ECB disappointment," he said, referring to the price movement after last Thursday's ECB meeting. "Far too much easing is priced in and as it unwinds, gold will come under pressure."

Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, also looks for a pullback this week, even though he's friendly to the metal.

"The market is beginning to be a little cautious about this week's Federal Reserve meeting ” or maybe traders are just locking in gains," Day said."Expectations are quite high, so there is unlikely to be a surprise on the upside. So we are cautious in the near term, up to and post the meeting. For this week, we'll say down -- but not by much, and we remain very positive fundamentally."

Peter Hug, global trading director of Kitco Metals, said he looks for volatility in a week when the Fed announces a decision on interest rates and is expected to provide forward guidance.

Source: Kitco News

RELATED NEWS
Bearish Cracks Appearing In Bullish Gold Market...
Monday, 19 August 2019 15:16 WIB

After three-straight weeks of gains, cracks are starting to appear in gold's bullish veneer, particularly among Wall Street analysts, according to the latest results of the Kitco News Weekly Gold Surv...

Wall Street, Main Street Sill Bullish On Gold, But Caution Creeping Higher...
Monday, 12 August 2019 12:41 WIB

The market remains emphatically bullish on gold. But, looking past the headlines, the yellow metal is beginning to look overbought, according to some analysts. The gold market is on track to see its ...

Gold Survey Shows Bulls In Full Control...
Monday, 5 August 2019 13:19 WIB

The gold bears had their chance to take control of the market but failed, and now the bulls are in full control as both Wall Street and Main Street expect to see higher prices in the near-term as unce...

Wall St., Main St. See Gold Prices Maintaining Upward Momentum...
Monday, 22 July 2019 13:24 WIB

Wall Street and Main Street look for gold to keep building on its recent gains, according to the weekly Kitco News gold survey. The metal hit a fresh six-year high in screen trading after renewed dov...

Wall St. Leans Neutral/Sideways On Gold Prices, Main St. Bullish...
Monday, 15 July 2019 13:42 WIB

Wall Street traders and analysts are undecided or else look for gold prices to be sideways this week, while Main Street remained bullish, according to the weekly Kitco News gold survey. The largest b...

LATEST NEWS
Hong Kong stocks finish week on positive note (Review)

Hong Kong shares ended the week with a healthy rise on Friday as investors look ahead to a key speech later in the day by Federal Reserve boss Jerome Powell hoping for hints at further interest rate cuts. The Hang Seng Index jumped 0.50 percent,...

Dow closes down more than 600 points after Trump orders U.S. companies to leave China

U.S. stocks ended the trading day sharply lower after President Trump escalated trade war rhetoric Friday, tweeting that he had "hereby ordered" U.S. companies "to immediately start looking for an alternative to China. The Dow Jones Industrial...

Oil prices slide 2.1% as US-China trade war escalates

Oil prices fell on Friday after China unveiled retaliatory tariffs against about $75 billion worth of U.S. goods, marking another escalation of a protracted trade dispute between the world™s two largest economies. Brent crude futures fell 50...

POPULAR NEWS
Gold ends flat, then moves lower in electronic trade after Fed minutes
Thursday, 22 August 2019 01:24 WIB

Gold prices finished unchanged on Wednesday, after spending much of the session losing ground on the back of strength in benchmark U.S. stock...

Gold posts lowest finish in nearly 2 weeks as bond yields climb
Friday, 23 August 2019 01:36 WIB

Gold futures declined on Thursday, pressured by strength in bond yields as the Fed™s symposium of central bankers got underway in Jackson Hole,...

Gold Holds Gain as Trump Says Not Ready to Make Deal
Wednesday, 21 August 2019 09:14 WIB

Gold held an advance as President Donald Trump showed no urgency to resolve the trade conflict with China, saying he wasn™t ready...

Gold Holds Drop as Traders Await Jackson Hole Meeting
Thursday, 22 August 2019 08:55 WIB

Gold held a decline as investors await a key address by Federal Reserve Chairman Jerome Powell at the annual Jackson Hole gathering on Friday...