Gold Fundamental Forecast – July 22, 2016

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Published: Jul 21, 2016, 12:11 UTC

Gold edged higher by $1.30 to trade at 1320.60 but remains bearish ahead of Mario Draghi’s presentation later today and the FOMC and BoJ next week. The

Gold Fundamental Forecast – July 22, 2016

Gold edged higher by $1.30 to trade at 1320.60 but remains bearish ahead of Mario Draghi’s presentation later today and the FOMC and BoJ next week. The gold price climbed a little higher today as investors chose security over uncertainty after Britain’s vote to leave the European Union left a large dent in business confidence.

The publication earlier this month of strong US employment data that points to a better outlook for the world’s largest economy could have a further impact on the price of gold.

Nitesh Shah, head of commodity research at ETF Securities, told Reuters that stronger non-farm payroll figures give the US Federal Reserve more ammunition to raise interest rates, “which could damage gold in the short-term”.

Gold is highly sensitive to interest rate rises, which lift the cost of holding non-yielding assets such as bullion while boosting the dollar in which it is priced.

The yellow metal price in global and domestic markets remained depressed on technical ground besides trading activity remained future-speculation based as major stakeholders made deals and remained busy manipulating future price during the trading sessions.

While gold lovers believe prices will only go higher from here, others say a rally will only last if central-bank actions boost inflation, which has historically been positive for the yellow metal. Higher rates lift the opportunity cost of holding non-yielding assets such as bullion, while supporting the dollar, in which gold is priced.

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Friday, July 22, 2016

Major Market Events
Country	Name	Volatility	Previous
JPY	All Industry Activity Index (MoM)	2	1.3
EUR	Markit PMI Composite	2	54.4
EUR	Markit Manufacturing PMI	2	54.5
EUR	Markit Services PMI	2	53.7
EUR	Markit Services PMI	2	52.8
EUR	Markit Manufacturing PMI	2	52.8
EUR	Markit PMI Composite	2	53.1
CAD	Retail Sales (MoM)	2	0.9
CAD	Consumer Price Index (MoM)	2	0.4
CAD	Consumer Price Index Core (MoM)	2	0.3
CAD	Consumer Price Index Core (YoY)	3	2.1
CAD	Consumer Price Index – Core (MoM)	2	0.4
CAD	Consumer Price Index (YoY)	3	1.5
USD	Markit Manufacturing PMI	2	51.3
USD	Baker Hughes US Oil Rig Count	2