Gold Fundamental Forecast – August 25, 2016

Low volume and general nervousness about the direction of U.S. interest rates kept gold prices in check on Wednesday. Many major investors were on the sidelines, choosing to wait until they get a little clarity from a speech by Federal Reserve Chair Janet Yellen on Friday which will be closely watched for clues as to the timing of the next Fed rate hike.

Yellen will deliver a speech before a group of central bankers at a conference held at Jackson Hole, Wyoming. Based on the price action in the gold market this week, it looks as if investors are already anticipating hawkish commentary from Yellen. This would put her in line with a few Fed members who recently issued hawkish comments about the strength of the economy and the timing of the next rate hike.

We expect to see low volatility Wednesday and Thursday as investors prepare for Yellen’s remarks on Friday. Traders are clearly focused on her Jackson Hole speech and any excessive price action today will likely be the result of thin trading conditions.

Going into the meeting, it looks as if investors are pricing in a 21 percent chance of a rate increase in September, a 50 percent chance of at least one hike by the end of the year, and a 100 percent chance of a 25-basis point hike in September 2017.

In other news, China reported that silver imports in July fell 36 percent year on year. Platinum imports were down by nearly half. Palladium imports rose 17 percent, however, and 28 percent in the first seven months of the year.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

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Thursday, August 25, 2016

Government Bond Auctions

Date/Time Country Type

Aug 24 10:03 Sweden Holds bond auction

Aug 24 10:30 Germany Eur 4bn 0% Oct 2021 Bobl

Aug 24 18:00 US Holds 2yr FRN auction & 5yr note auction

Aug 25 18:00 US Holds 7yr note auction

Aug 26 10:10 Italy Holds zero coupon