Gold Fundamental Forecast – September 15, 2016

Gold is trading higher in reaction to the weaker U.S. Dollar as investors waited for clues as to the timing of the next Fed rate hike. Based on the CME FedWatch Indicator, investors have concluded that a September rate hike is nearly off the table with the chances sitting at 15 percent just a week before the central bank’s interest rate announcement.

Gold tends to rally when the dollar weakens because of increased demand from foreign traders. Gold may also catch a bid today if stocks continue to break sharply since it will likely be used as a hedge against further loss.

The last quote showed spot gold up 0.27 percent at $1322.26 an ounce. December Comex Gold futures were trading at $1325.90, up 0.20 percent.

December Comex Silver futures which at times have moved lock-step with gold and other times took the lead in the metals complex were trading at $18.93 or up 0.44%. October Platinum which has taken on both the characteristics of a precious metal and industrial metal this year is trading 0.35 percent higher at $1035.85. December Palladium which closely tracks platinum is at $653.47, up 0.3%.

Helping Platinum catch a bid is the news that top producer Anglo American Platinum announced it’s shutting down a smelter responsible for one fifth of its refined platinum output capacity.

The news that South African mine production figures for July released on Tuesday showed PGM output fell by 10.8% compared to June and 8.2% year on year as miners close down unprofitable mines and safety stoppages halt operations, has also helped underpin platinum prices.

The direction of the gold market today will be determined by the price action and movement by the U.S. Dollar. Volume is expected to be light so volatile moves could take place because of the thin market conditions. The early price action suggests the dollar will be weak today as investors continue to reduce their long positions ahead of the Fed interest rate announcement next Wednesday. This could help underpin gold into the close.

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 15, 2016

Government Bond Auctions

Date/Time Country Type

Sep 14 11:05 Norway Holds bond auction

Sep 14 11:30 UK 0.125% 2046 I/L Gilt

Sep 14 11:30 Germany Eur 1bn 2.5% Jul 2044 Bund

Sep 15 10:30 Spain Holds bond auction

Sep 15 11:03 Sweden Holds I/L bond auction

Sep 15 11:50 France Holds bond auction