Phil Carr
The Gold & Silver Club
Gold prices have made a strong recovery from March lows, boosted by President Joe Biden's massive $2.3 trillion infrastructure stimulus plan.
Similar to the $1.9 trillion stimulus plan signed only a few weeks ago – Biden’s new package will involve pumping hundreds of billions of dollars into improving the nation’s aging roads, bridges, schools, railways, waterways, airports and cellular network.
Biden’s multi-trillion dollar infrastructure bill is expected to spur the nation's biggest buying spree in commodities, which further suggests that we could be on verge of a supercycle, as demand outstrips supply this year.
Looking ahead to this week, trader’s attention has now shifted to Minutes from the Federal Reserve’s most recent meeting on monetary policy, due for release on Wednesday. The minutes are expected to provide some clarity into continuing debates at the central bank about the trajectory of the economic recovery, inflation and the recent rise in U.S borrowing costs.
Other key macro events this week will include; speeches from various FOMC members, the ISM Non-Manufacturing Report and PPI data.
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:
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EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
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