TD Securities looks for gold to snap back since analysts don’t expect Federal Reserve Chair Janet Yellen to be as hawkish in a Friday speech as many traders seem to anticipate, says TD Securities. Comex December gold Thursday fell as far as $1,321an ounce and was down $4.30 to $1,325.40 as of 12:27 p.m. EDT. “Speculative investors seemed to have abandoned their long gold positions on the concern that…Yellen may signal a firm commitment to hike rates this year in her Jackson Hole policy symposium address this Friday,” TDS says. “Some gold observers are even arguing that the FOMC may increase rates as early as September. However given the gold market’s prepositioning for a more hawkish tone (a somewhat firm commitment to a hike in the second half of 2016) than is likely to be sounded by the Fed chair, the yellow metal may post a smart rebound from these lows.” TDS says Fed policymakers may sound a more hawkish tone than they have been, but nevertheless doubts there will be “an outright pledge to hike before year-end.”
By Allen Sykora of Kitco News; asykora@kitco.com
Even Yellen Doesn’t Know What Will Come of Jackson Hole – Dennis Gartman
Thursday August 25, 2016 10:39
As markets await the outcome of the much anticipated Jackson Hole summit, one famed economist says not even Fed Chair Janet Yellen knows what lies ahead. “What shall Dr. Yellen say? Quite honestly we’ve no idea, and we suspect that at this point neither does she,” said Dennis Gartman in his Thursday newsletter. The marketplace is awaiting the Federal Reserve’s annual symposium that starts Thursday in Jackson Hole, Wyoming. Fed Chair Janet Yellen speaks at the event on Friday. While it’s hoped she will shed new light on the timing of any future interest rate increase from the U.S. central bank, many think her speech will not yield much fresh insight. However, past Jackson Hole Fed confabs have produced markets-moving results. “Being data-driven, each new bit of economic news sways our thoughts on what the Fed shall do and we suspect that Dr. Yellen’s thoughts are swayed in the same manner,” Gartman said. The forex and capital markets are on “tenter-hooks” awaiting what Yellen will say, Gartman added. Gold hit four-week lows on Thursday, under pressure from upbeat U.S. data in the run-up to Yellen’s speech.
By Daniela Cambone of Kitco News; dcambone@kitco.com
Analysts: Comex Gold Dips Below 50-Day Average Ahead Of Yellen
Thursday August 25, 2016 09:36
Gold futures have fallen below the 50-day moving average in the run-up to Federal Reserve Chair Janet Yellen’s highly anticipated speech Friday, although one bank looks for the metal to bounce right back if Yellen does not signal a potential rate hike. As of 9:10 a.m. EDT, Comex December gold was $5.50 softer at $1,324.20 an ounce. George Gero, managing director with RBC Wealth Management, points out that the market is below the 50-day average, which stood at $1,338.40. Sell stops – pre-placed orders triggered when certain chart points are hit – were triggered Wednesday and again early Thursday in the run-up to Yellen, he says. “Clearly some market participants are positioning themselves ahead of Yellen’s speech, though we are skeptical about whether the Fed chair will really give any clear indications of the next rate hike tomorrow,” says Commerzbank. “If she does not, a renewed increase in gold and silver prices can be expected.”
By Allen Sykora of Kitco News; asykora@kitco.com
HSBC Cautions Yellen Speech May ‘Leave Gold With Little To Go On’
Thursday August 25, 2016 09:36
The gold and other markets are focused on Federal Reserve Chair Janet Yellen’s Friday speech in Jackson Hole, yet the event could end up being dry, technical and not offer markets much guidance, says HSBC. She is likely to maintain a neutral stance on monetary policy, suggesting that gradual increases in the Federal funds rate would be appropriate if labor-market conditions keep improving and inflation rises closer to 2%, says HSBC chief U.S. economist Kevin Logan. However, unless she specifies a time-frame for the next rate hike, her comments are unlikely to change market expectations that the chances of a rate increase at the September policy meeting are relatively low. “A rate hike delay would be neutral to bullish gold,” says HSBC metals analyst Jim Steel. Meanwhile, the outlook for U.S. monetary policy is unlikely to be the thrust of the symposium, HSBC says, with the meeting focusing on evolving frameworks for monetary policy. HSBC says discussions could be mostly technical and have little immediate market impact. Logan says she will likely review the progress made on how to design effective frameworks for the conduct of monetary policy in a world of changing financial regulations and potentially low “natural” interest rates. It could be a dry and technical speech, and it does not appear that there is much agreement on the subject, Logan says. “This type of content may leave gold with little to go on,” Steel says.
By Allen Sykora of Kitco News; asykora@kitco.com
BBH: Yellen Unlikely To Rule Out September Rate Hike
Thursday August 25, 2016 09:36
Financial futures have upped the likelihood of Federal Reserve tightening, although it still remains low, and Fed Chair Janet Yellen is unlikely to rule it out when she addresses a Jackson Hole symposium Friday, says Brown Brothers Harriman. “Two of the three Fed leaders have already provided their general take on the economic outlook and prospect for a Fed hike this year,” BBH says. “It seems unreasonable to expect Yellen (to) substantially deviate, to the extent that she deals with immediate issues as opposed to addressing the topic of the title of the symposium, ‘Designing Resilient Monetary Policy Frameworks for the Future.’ Although a September hike seems unlikely, there is nothing to be gained from Yellen ruling it out. The Fed wants investors to know that every meeting is actionable, though there is no precedent for a move in November, the month of the national election.” As of Wednesday, the Federal fund futures had upgraded the odds of a September hike to 28% from 18% on Aug. 1 and 26% on Aug. 5 after the U.S. jobs data, BBH adds.
By Allen Sykora of Kitco News; asykora@kitco.com
