All last week gold was trying to find some momentum, but could not get out of the sideways trend. This week could be the beginning of a turning point for the gold market, as the downward movement for the US dollar was already in its final stages by the end of last week.
One of the most important days will be Wednesday. On that day, the Fed’s so called “white paper” will be released which describes the economic problems and trends in the USA. The better the report, the more positive for the USD. If the report is saturated with pessimism, it will be a negative signal for the USD.
The level of 1835 USD/oz proved too strong for gold so far, and on Tuesday we saw a correction to the region of 1795. It happened on the background of the US dollar strengthening, which has been weakening for quite a long time. However, considering the current situation in the US and global economies, this move might be temporary.
The outlook for gold remains positive. The latest PMI data shows that the economy is slowing down globally. Unemployment in the US is still stalling. Stimulus packages in the USA are still not agreed.
There will be a Fed meeting in a fortnight, which may clarify the situation regarding QE roll-over and future interest rates. So many uncertainties are unlikely to give the bulls any chance of a rally in the USD.
As a result we may see poor Q3 reporting data. And let’s not forget that the reporting season will start in mid-October, which is likely to see a correction in the stock market. Therefore, this autumn could be quite interesting for gold in terms of good gains.
01.50 Japan’s Q2 GDP
16.00 Bank of Canada interest rate decision
19.10 FOMC member Williams speech
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