December Comex Gold futures rose nearly 1.0% on Wednesday, finishing at $1359.20, up $12.50 as weak productivity data weighed on the U.S. Dollar making
December Comex Gold futures rose nearly 1.0% on Wednesday, finishing at $1359.20, up $12.50 as weak productivity data weighed on the U.S. Dollar making dollar-denominated gold a more attractive investment.
Precious metal September Comex Silver followed gold higher by posting a 2.82% increase at $20.41 while Industrial metal October Platinum finished at $1196.00, up $38.10 or $3.28%.
The biggest mover of the day was September Palladium which soared to multi-month high at $740.25, up $45.90 or 6.61%.
Gold, which is primarily used as a hedge against economic and financial uncertainty was driven higher after a report showed U.S. worker productivity fell for a third straight quarter during the April to June time period. This news drove U.S. Treasury yields lower as investors began to reduce the chances for a Fed rate hike in 2016. Lower yields weighed on the U.S. Dollar which made it a less desirable investment.
While some fundamental traders are saying that platinum and palladium are rallying because of strong car sales or reduced supply from Russia, realists are saying these markets are going up because they are relatively underpriced when compared to gold and silver. Basically, investors are getting more “bang for the buck” by buying these two markets since all metals are expected to firm when the dollar weakens.
Other traders are saying that thin market conditions contributed to the huge spike in palladium, suggesting that perhaps the rally is over-inflated and likely to correct back to more reasonable levels once the U.S. Dollar stabilizes.
As far as the forecast is concerned, one has to realize that the metals traders are being reactive rather than proactive. This means you’ll have to spend as much time watching the price action in the Dollar and following U.S. economic activity and the Fed to get a good grasp on the strength of these rallies.
Since the direction of the dollar is the primary driver of gold prices, for example, you just need to know that any weak U.S. economic reports will mean the Fed is likely to remain cautious about raising rates and this will be bearish for the dollar and supportive for higher gold prices.
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:
Cur. | Event | Actual | Forecast | Previous | |
AUD | Westpac Consumer Sentiment (Aug) | 2.0% | -3.0% | ||
AUD | Home Loans (MoM) (Jun) | 1.2% | 2.4% | -0.8% | |
AUD | RBA Governor Stevens Speaks | ||||
JPY | Tertiary Industry Activity Index (MoM) | 0.8% | 0.3% | -0.7% | |
EUR | German 10-Year Bund Auction | -0.09% | -0.050% | ||
USD | OPEC Monthly Report | ||||
USD | JOLTs Job Openings (Jun) | 5.574M | 5.500M | ||
USD | Crude Oil Inventories | -1.025M | 1.413M | ||
USD | Cushing Crude Oil Inventories | -1.123M | |||
USD | 10-Year Note Auction | 1.516% | |||
USD | Federal Budget Balance (Jul) | -113.0B | 6.0B | ||
NZD | Interest Rate Decision | 2.00% | 2.25% | ||
NZD | RBNZ Monetary Policy Statement | ||||
NZD | RBNZ Rate Statement | ||||
NZD | RBNZ Gov Wheeler Speaks | ||||
GBP | RICS House Price Balance (Jul) | 6% | 16% | ||
NZD | RBNZ Gov Wheeler Speaks |
Upcoming Economic Events that you should be monitoring:
Thursday, August 11, 2016
Cur. | Event | Actual | Forecast | Previous |
USD | IEA Monthly Report | |||
USD | Export Price Index (MoM) (Jul) | 0.1% | 0.8% | |
USD | Import Price Index (MoM) (Jul) | -0.3% | 0.2% | |
USD | Initial Jobless Claims | 265K | 269K | |
CAD | New Housing Price Index (MoM) (Jun) | 0.3% | 0.7% | |
NZD | Business NZ PMI (Jul) | 57.7 | ||
NZD | Core Retail Sales (QoQ) | 1.1% | 1.0% | |
NZD | Retail Sales (QoQ) (Q2) | 1.0% | 0.8% | |
CNY | Fixed Asset Investment (YoY) (Jul) | 8.8% | 9.0% | |
CNY | Industrial Production (YoY) (Jul) | 6.1% | 6.2% |
Government Bond Auctions
Date/Time Country Type
Aug 10 11:00 Germany EUR 5B 0% 2026 Bund
Aug 10 19:00 US 10-yr Note auction
Aug 11 11:30 UK 0.125% I/L 2036
Aug 11 19:00 US 30-yr Bond auction
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.