Gold Fundamental Forecast – September 9, 2016

Gold continued its slow march upwards gaining $2.25 to trade at 1351.45 as the probability of a Federal Reserve rate increase in September weakens. Last night the Federal Reserve released their Beige Book outlook on the economy and they said the jobs market has improved and they are seeing a slight rise in inflation but nothing that would cause them to react this soon. Investors this week have also trimmed bets that the Federal Reserve will raise U.S. interest rates when the panel next meets in a couple of weeks after a surprisingly weak report on the U.S. service-sector on Tuesday and little alarm in the latest beige book report. These reports followed data last week that showed slower job growth in August and an unexpected pullback in ISM’s index of monthly manufacturing activity.

The European Central Bank (ECB) is scheduled to deliver its next policy statement at 12:30 GMT. The Bank is widely expected to keep interest rates unchanged following a lackluster economic quarter. Like many other central banks, the ECB is desperately trying to reach its inflation target of around 2%, and has expanded monetary policy profusely in order to do so. Eurozone inflation has gradually picked up in recent months after spending the first part of the year at or below zero.

In economic data, China’s trade picture improved in August, as imports rose for the first time in nearly two years. Beijing posted a trade surplus of $52.05 billion last month, little changed from July. However, imports rose 1.5% annually, confounding expectations for a 4.9% drop. Exports fell 2.8%, well below July’s 4.4% decline.

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Upcoming Economic Events that you should be monitoring:

 September 9, 2016

Government Bond Auctions

Date Time Country Auction

Sep 08 11:00 Ireland Holds bond auction

Sep 08 17:20 Italy Announces details of bond auction