UBS looks for any potential damage from Federal Reserve hawkishness to be limited. “The focus this week will be Fed Chair Yellen’s speech at Jackson Hole, where investors will look for guidance on Fed policy,” UBS says in an early-week research note. “We expect Fed comments to hint at the potential for a hike later in the year – improving U.S. data and hawkish comments from the Fed could weigh on gold, especially given positioning has lingered close to all-time highs.” Net speculative length on Comex as of Aug. 16 was around 91% of the all-time high, despite a decline over the past six weeks, UBS says. “Having said this, we think the gold trade is not overcrowded and any downside should ultimately be limited amid lurking interest to buy dips. We have held the view that the impact of Fed policy decisions to gold are not as straight forward in this environment where global yields are under pressure and macro uncertainty is elevated. While gold is likely to come under pressure ahead of a Fed rate hike – which we expect to occur in December – we would view the dip as a buying opportunity.”
By Allen Sykora of Kitco News; asykora@kitco.com
Commerzbank: Other Than Fed, ‘Environment For Gold And Silver Remains Positive’
Wednesday August 24, 2016 09:01
Other than worrying about what Federal Reserve Chair Janet Yellen will say Friday, conditions remain favorable for gold, says Commerzbank. Traders will be closely monitoring Yellen’s scheduled speech at a Fed symposium for clues on whether to expect an interest-rate hike, particularly after hawkish comments from other policymakers over the last week. “Apart from this short-term factor, the environment for gold and silver remains positive,” Commerzbank says. “The monetary policy pursued by the major central banks is and will for the foreseeable future remain ultra-expansionary. Even a 25-basis-point rate hike by the Fed would do little to change this. Around the world, bonds worth $12 trillion are meanwhile showing negative yields – something that has never happened before to this extent. Then there are the numerous political and geopolitical uncertainties, so any falls in the prices of gold and silver should prove short-lived.”
By Allen Sykora of Kitco News; asykora@kitco.com
RBC’s Gero: Comex Gold Pulling Back Ahead Of Yellen Speech, Options Expiry
Wednesday August 24, 2016 09:01
Comex gold continues to pull back ahead of an options expiration Thursday, a highly anticipated speech by Federal Reserve Chair Janet Yellen Friday, and first-notice day for the August futures at the end of the month, says George Gero, managing director with RBC Wealth Management. “Fears of (a) Fed rate hike (are) becoming more pronounced ahead of all this, with a limited audience and more hawkish tones from Fed speakers,” he says. As of 8:55 a.m. EDT, Comex December gold was $9.50 softer at $1,336.60 an ounce.
By Allen Sykora of Kitco News; asykora@kitco.com
