Phil Carr
The Gold & Silver Club
Gold prices are currently engaged in a tug-of-war as traders await a fresh fundamental spark to ignite gold’s next big move.
The biggest market-moving event, that traders will be closely monitoring this week – is the outcome of the U.S Federal Reserve's two-day policy meeting, which is due to end on Wednesday, 16 September.
Last month, the Fed announced that the central bank’s inflation target could exceed 2%, which would drive inflation slightly higher, whilst keeping interest rates lower for longer.
There is a huge focus on this event, as it’s the Fed’s last meeting prior to the U.S Presidential Election.
The Fed’s two-day meeting will be scrutinized for clues on how the central bank plans to hold down rates while aiming to boost inflation. The Fed is also expected to revise its economic and interest rate outlook, including forecasts for 2023 for the first time.
Gold prices are currently trading in a tight range, which ultimately indicates a big move is on the horizon. The only question now, is which way.
Where are prices heading next? Watch The Gold & Silver Club Commodity Report now with Phil Carr for the latest price forecasts and predictions:
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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