Gold starts week lower ahead of heavy news slate, central banks eyed Gold slipped Monday after three weeks of gains as traders have a full economic calendar to monitor this week that could shape the near-term price outlook for the metal, in particular U.S. data and a policy statement after the Federal Reserve meeting. Ahead of the heavy calendar, gold for immediate delivery rose 0.23 percent or 3.10 points to trade at $ 1,323.43 after opening at $1,333.11, having earlier hit a high of $1,334.70, and a low of $1,322.80. U.S. FOMC, GDP data: Market participants will be watching U.S. data and a policy statement after the Federal Open Market Committee meeting for more signs on when tapering of quantitative easing might start. Gold posted gains last week after previously falling as Fed’s President Ben Bernanke reassured markets by stressing the need to continue providing accommodation, while at the same time stressing the ‘data dependent’ nature of those plans. Monetary stimulus from the Fed and other central banks to aid economic growth has been credited for pushing gold prices higher in recent years. Investors will also keep their eyes on U.S. July employment report and second-quarter gross domestic product (GDP). The advanced second quarter GDP report, to be released Wednesday, is expected to be somewhat modest, limited by slower construction and trade figures. The advanced reading is expected to show the U.S. economy grew by 1.0 percent in the second-quarter. The July employment report, due on Friday, is expected to show a steady pace of job growth, while any surprises up or down are likely to stir markets , as the expectation for a Stimulus tapering by the FOMC is contingent on this pace of job creation. ECB, BOE monetary decisions: In Europe, The European Central Bank (ECB) and the Bank of England (BoE) are due to hold their monetary policy meet this week, could give clarity on the monetary policy stance of major central banks and impact gold’s inflation- hedge appeal. Starting with the ECB, analysts expect the central bank to hold in the bank’s borrowing cost in August amid signs of progress from the economy. ECB`s Cheif Mario Draghi has pointed during its first forward guidance in July that the bank would keep interest rate at its current low level or even lower for an extended period. Meanwhile, policymakers of the BoE are also estimated to keep both interest rate and asset purchases at 0.50% and £375 billion after BoE’s new governor Mark Carney and the other eight MPC members voted in July to keep both interest rate and APF as the economy shows signs of recovery. - Silver dropped 0.43% to trade around $ 19.17 - Platinum gained 0.33% to $ 1,427.32 - Palladium added 0.08% to $ 723.90 source link bit.ly/17OhQss
Posted on: Mon, 29 Jul 2013 07:56:47 +0000
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