Today’s Spotlight Market
Gold futures continue to trade in a choppy, sideways pattern, unable to find a near-term direction. Like many markets, Gold futures have been somewhat quiet ahead of September, when trading activity is likely to pick up. Traders are also awaiting the September FOMC meeting, although there is an extremely low expectation that the central bank will make any tweaks to its monetary policy.
Fundamentals
The US Dollar Index has fallen to its lowest levels since late June on the diminished expectations of Fed action in their remaining meetings this year.? Fed Fund futures are pricing in a 9% chance of a rate increase for the September, while the odds of an increase in December fell to 46%, down from 53% just a day earlier.? Gold has found support from the weaker greenback, however the enthusiasm could be tempered by uninspiring economic data in the US and overseas.? Japan?s flat GDP growth and weaker retails sales in the US have cast doubt over global economic growth, which limits Gold?s potential as an inflation hedge.
Technical Notes? -? View Today’s Chart
Turning to the chart, we see the December Gold contract forming a wedge/triangle pattern. Given the preceding move higher, this suggests an upward breakout bias from the pattern.? An upward breakout would suggest that prices could test the 1400 level.? A downward breakout suggests prices could test near-term support around the 1320 level and, possibly, the 1300 mark.? The oscillators are giving neutral readings and offer no hint at the near-term direction of the market.
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