Gold Fundamental Forecast – September 1, 2016

A stronger U.S. Dollar helped push gold prices lower on Wednesday and in a position to finish August with a monthly loss. The last report showed the December Comex Gold futures contract trading at $1311.90, down $4.60 or -0.35%.

Silver prices, however, bucked the trend, moving 0.14% higher to $18.70. The move was mostly fueled by technical factors. October Platinum also traded slightly better at $1059.10, up $2.50 or +0.24%.

Helping to support the dollar on Wednesday was the ADP Non-Farm Employment Change report for August. It showed the private sector added 177,000 jobs this month. Economists were looking for 175,000. Mostly, however, it likely means that Friday’s U.S. Non-Farm Payrolls report will come in at 177,000 or better.

A strong jobs number may give the Fed a reason to consider raising rates as early as September. Since last Friday, the chances of a Fed rate hike next month have risen from 18% to about 25%. The chances of an increase in December is up to 55% from 50%.

Today’s bullish news supports Fed Chair Janet Yellen’s statement last Friday that the economy is strengthening. Although she failed to convince investors that a September rate hike is a possibility, strong jobs data on Friday could change investor sentiment. Fed Vice Chair Stanley Fischer went even further with his hawkish commentary on Friday, saying that two rate hikes by the end of the year was a “possibility”.

Unless there is a massive, position-squaring short-covering rally late Wednesday, we expect rallies to be capped and support to possibly continue to erode, depending on how aggressive the short-sellers are.

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.

Today’s economic releases:

Upcoming Economic Events that you should be monitoring:

Thursday, September 1, 2016

Government Bond Auctions

Date/Time Country Type

Aug 31 11:05 Norway Holds bond auction

Aug 31 11:30 Germany Eur 4bn Sep 2018 Schatz

Sep 01 10:30 Spain Holds bond auction

Sep 01 11:30 UK Jul 2022 Gilt

Sep 01 11:50 France Holds bond auction