Gold Fundamental Forecast – September 14, 2016

Gold recovered some of its losses to trade at 1329.10 as traders bought up the cheaper commodity on hopes that the Fed will hold rates next week. Gold gained $3.50 in today’s session. Gold snapped a four-day losing streak after Federal Reserve governor Lael Brainard defused traders’ fears that the US may raise interest rates imminently.

There’s no rush to boost rates as inflation and employment aren’t overshooting, Brainard said in a speech on Monday that marked the final public statement from a Fed official before the central bank meets to decide policy on September 20-21. Low borrowing costs support gold, which offers no yield.

“Brainard’s comments have managed to put a floor under the market,” Ole Hansen, head of commodity strategy at Saxo Bank, said by phone. “There are tough negotiations going on within the Fed. The risk of a surprise hike cannot be ruled out and you’re still seeing some of that nervousness in the market.”

Precious metals market showed signs of recovery but oil futures continued to slide as the market remains unconvinced about producers’ output freeze talks yielding much success. FXTM chief market strategist Hussein Sayed said markets received a boost on Tuesday after remarks from Fed governor Lael Brainard lowered the odds of an imminent rate hike when the Fed meets next week.

“Markets were anxiously awaiting Brainard’s’ comments to see whether recent economic data was sufficient to turn one of the most dovish members into a hawk, but she made it clear that there are a number of factors to be taken into consideration before pulling the trigger on hiking rates such as the absence of accelerating inflationary pressures and risk from abroad.”

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 September 14, 2016

Government Bond Auctions

Date Time Country Auction

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