Today’s Spotlight Market
Gold futures rebounded a bit to start off the week, after suffering the largest weekly loss in over a month.? The losses could largely be attributed to comments from Fed Chair Janet Yellen at Jackson Hole, which had a far more hawkish tone than traders had expected.? Yellen said the case for a Fed rate increase had strengthened in recent months, but would remain dependent on what incoming data says about the U.S. economy.? This caused the US Dollar to firm up and sunk Gold prices.? There seemed to be a bullish consensus among traders prior to the policy statement, but we are now left with more indecision.
Fundamentals
Despite the hawkish tone to Yellen?s speech, traders are not expecting the Federal Reserve to raise interest rates in September, while the odds of a December rate increase remain a coin flip. All eyes will be on the Fed?s policy statement in September, which may offer clues as to how the FOMC will close out the remainder of the year.? Traders will also be looking for clues this Friday, when the U.S. Bureau of Labor Statistics releases its non-farm payrolls data.? A strong showing from the report could be seen a negative for Gold prices and could result in further advances in the US Dollar Index. Jewelry demand for Gold has been extremely sluggish, adding to the metal?s woes and resulting in investment being the only real driver on the demand side of the equation.
Technical Notes? -? View Today’s Chart
Turning to the chart, we see the December Gold contract breaking out of a triangle/pennant pattern to the downside.? Prices may come down to test support around the 1300 mark, which can be seen as a fairly significant near-term support level.? The 20-day moving average may be on the verge of crossing the 50-day moving average on the downside, which could be seen as bearish.
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