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Fed Chair Powell’s Remarks Provide A Boost

GOLD
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Gold is trading 0.2% higher in the Asia-Pacific session after closing 0.4% higher at $2,422.27 yesterday. This follows an intra-day high of $2,439.80, just $10 short of the May 20 record.

  • On Monday, Fed Chairman Powell had a cordial interview with David Rubenstein at the Economic Club of DC. While expressly stating he would not comment on markets, Chairman Powell’s remarks struck a predictably dovish-leaning message in light of recent data, repeating previous comments that the labour market is back to roughly where it was pre-pandemic; for inflation, in Q2 we had "3 better readings" following June's reports.
  • The market’s focus now turns to today’s Retail Sales, Import/Export Prices, and upcoming earnings from Bank of America, Charles Schwab, State Street and Morgan Stanley.
  • The market is pricing about 65bps of Fed rate cuts by the end of the year.
  • Lower rates are typically positive for gold, which doesn’t pay interest.
  • According to MNI’s technicals team, key resistance is at $2,450.1, the May 20 high, while initial support to watch lies at the 50-day EMA, at $2,339.3.
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Gold is trading 0.2% higher in the Asia-Pacific session after closing 0.4% higher at $2,422.27 yesterday. This follows an intra-day high of $2,439.80, just $10 short of the May 20 record.

  • On Monday, Fed Chairman Powell had a cordial interview with David Rubenstein at the Economic Club of DC. While expressly stating he would not comment on markets, Chairman Powell’s remarks struck a predictably dovish-leaning message in light of recent data, repeating previous comments that the labour market is back to roughly where it was pre-pandemic; for inflation, in Q2 we had "3 better readings" following June's reports.
  • The market’s focus now turns to today’s Retail Sales, Import/Export Prices, and upcoming earnings from Bank of America, Charles Schwab, State Street and Morgan Stanley.
  • The market is pricing about 65bps of Fed rate cuts by the end of the year.
  • Lower rates are typically positive for gold, which doesn’t pay interest.
  • According to MNI’s technicals team, key resistance is at $2,450.1, the May 20 high, while initial support to watch lies at the 50-day EMA, at $2,339.3.