Gold Fundamental Analysis – Forecast for the week of September 19, 2016

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Published: Sep 17, 2016, 06:53 UTC

Gold ended the week at the bottom of its trading range as traders prepare for the BoJ and the FOMC as the odds of a rate increase this year grows. Gold

Gold ended the week at the bottom of its trading range as traders prepare for the BoJ and the FOMC as the odds of a rate increase this year grows. Gold closed the week at 1313.25 down 1.27% for the week and is down almost 24% on the year to date basis. Gold is a strong buy moving into the next week. Buy on dips. Gold touched its lowest level since the UK voted to leave the European Union back in June as it just managed to keep its head above the US$1,300 mark on Wednesday.

The precious metal did recover somewhat in the afternoon session to actually post a small gain, although it remains under pressure from renewed confidence that the Federal Reserve will raise interest rates before 2016 is out. The Fed has previously said that it would seriously consider upping rates should US data continue to point towards a recovering economy.

A rate rise would have a negative impact on the price of gold as it would increase the opportunity cost of holding non-yielding bullion, while simultaneously boosting the dollar, which the yellow metal is priced in, making it more expensive to foreign currencies.

A hike would also suggest to markets that the global economy is in better shape, reducing the need for ‘safe-haven’ assets such as gold.

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This Week’s Economic Events That You Should Be Monitoring:

Date	Country	Name	Volatility	Previous
9/20/2016	AUD	RBA Meeting’s Minutes	3
9/20/2016	CAD	BoC Governor Poloz	3
9/21/2016	AUD	Mid-Year Economic Outlook	3
9/21/2016	JPY	BoJ Interest Rate Decision	3	-0.1
9/21/2016	JPY	BoJ Monetary Policy Statement	3
9/21/2016	JPY	BoJ Press Conference	3
9/21/2016	USD	FOMC Economic Projections	3
9/21/2016	USD	Fed’s Monetary Policy Statement	3
9/21/2016	USD	Fed Interest Rate Decision	3	0.5
9/21/2016	USD	FOMC Press conference	3
9/21/2016	NZD	RBNZ Interest Rate Decision	3	2
9/22/2016	EUR	ECB President Draghi’s Speech	3
9/23/2016	AUD	RBA’s Governor Lowe Speech	3