Gold Fundamental Forecast – August 1, 2016

Gold ended the day slightly down at 1340.65 after the Bank of Japan held rates and policy to the surprise of the markets this morning. Kitco said that the much-anticipated two-day Bank of Japan meeting ended Friday with an announcement from the BOJ that it will double its U.S. dollar-lending facility and double its purchases of exchange-traded stock funds. While it was expected the BOJ would implement some sort of a new monetary policy stimulus package, the announced package was met with disappointment among Asian market watchers. Japan’s Nikkei stock index did end slightly higher Friday and the Japanese yen gained against the U.S. dollar. Other Asian stock markets were slightly lower. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.

The dollar price of gold bullion will hold onto its gains next week, according to respondents to S&P Global Platts Gold Sentiment Survey, on expectations the macro economic environment will continue to support prices.

Gold recovered up to 1.5% this week to $1,340 Thursday as the Federal Reserve downplayed the chance of an additional rate hike this year, before easing to around $1,330 Friday morning.

The U.S. Department of Commerce said that the U.S. economy grew 1.2% in the second quarter, up only slightly from revised first quarter growth of 0.8%; the previous reading of first quarter growth was at 1.1%. However, consensus forecasts, economists were expecting to see the U.S. expand 2.6% in the second quarter.

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Monday, August 1, 2016

Government Bond Auctions

Date/Time Country Type

Aug 2   JPY                  10-Year JGB Auction                          -0.243%

Aug 2   USD                4-Week Bill Auction                           0.270%