Gold Fundamental Forecast – September 12, 2016

Gold gave back almost $4 but remained in a holding pattern just like Wall Street with traders unable to decide on what the Federal Reserve will decide later this month. The Bank of Japan meeting is also up in the air. Gold is trading at 1337.95. Gold has risen just 0.8% in 2016’s third quarter so far.

That’s a far cry from the 30% rise seen in the year’s first half- the metal’s strongest first half since the 1980s. As a result, ANB Amro’s metal strategy team has had a little rethink.

Third-quarter performance has been “disappointing,” its coordinator Georgette Boele wrote.

“We had expected a stronger rally for several reasons,” she went on.  Like many other market watchers, the Dutch bank had expected more immediate fallout from June’s Brexit vote.

“In fact, this did not materialize as investor sentiment on financial markets improved also helped by the recent stronger-than-expected UK data,” Boele wrote.

“Second, our main scenario was that the Fed would remain on hold in 2016. However, recently we moved to a 25 basis point rate hike in December 2016.”

Upside risks to prices would include Donald Trump winning the White House in November. On the downside, stronger US economic data spurring faster rate hikes could pose a threat. It remains to be seen whether gold’s comparatively lackluster showing will prompt more rethinks.

Investors may well recall that investment superstar George Soros offloaded much of his holdings at the end of June. His fund returned to the metal in the first quarter after avoiding it for two.

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Upcoming Economic Events that you should be monitoring:

 September 12, 2016

Government Bond Auctions

Date Time Country Auction

Sep 12 11:30 Germany Eur 2bn Mar 2017 Bubill

Sep 12 13:00 Norway Details of bond auction on Sep 14

Sep 13 11:00 Netherlands Eur 2-3bn 0% Jan 2022 DSL

Sep 13 11:10 Italy Holds bond auction

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