Analysis and Recommendations: Gold dipped $5.20 losing in the Asian session and then sitting tight the rest of the day as traders focus on the climbing US
Gold dipped $5.20 losing in the Asian session and then sitting tight the rest of the day as traders focus on the climbing US dollar after positive comments from Fed members seem to indicate that an interest rate increase in September was a done deal. Gold moved to 1085.50 while silver fell to 14.485 and platinum fell $7.15 to 951.35. Gold prices have been hovering at five-year lows as investors sold the precious metal in preparation for a potential increase in U.S. interest rates. The Federal Reserve is widely expected to increase borrowing costs before the year is out, ending a historic period of near-zero interest rates. Like other commodities, gold doesn’t pay interest and costs money to store. This will make it harder for the precious metal to compete with interest-bearing assets like Treasury bonds once the U.S. central bank tightens monetary policy.
“As we’re approaching September, certain Fed members are getting hawkish,” said Ira Epstein, a broker with Linn & Associates in Chicago. “The Fed wants to get aggressive and raise the rates, and that is going to give a bid to the dollar and that is going to be negative gold,” he said.
Platinum plunged to a 6½-year low, while palladium fell to a 2½-year low on continued worries about weaker demand from China. Investors worry that the country’s slowing economy will dent domestic demand for cars. Both platinum and palladium are widely used in car exhaust filters, and China is the world’s largest car market.
FxEmpire provides in-depth analysis for each currency and commodity 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.
Today’s economic releases:
Cur. |
Event |
Actual |
Forecast |
Previous |
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CNY |
Caixin Services PMI (Jul) |
53.8 |
52.2 |
51.8 |
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RUB |
Markit Services PMI (Jul) |
51.6 |
49.2 |
49.5 |
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CHF |
CPI (MoM) (Jul) |
-0.6% |
-0.4% |
0.1% |
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EUR |
Spanish Services PMI (Jul) |
59.7 |
55.5 |
56.1 |
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EUR |
German Services PMI (Jul) |
53.8 |
53.7 |
53.7 |
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EUR |
Markit Composite PMI (Jul) |
53.9 |
53.7 |
53.7 |
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EUR |
Services PMI (Jul) |
54.0 |
53.8 |
53.8 |
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GBP |
Services PMI (Jul) |
57.4 |
58.0 |
58.5 |
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EUR |
Retail Sales (MoM) (Jun) |
-0.6% |
-0.3% |
0.1% |
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Upcoming Economic Events that you should be monitoring:
Thursday, August 6, 2015
Cur. |
Event |
Actual |
Forecast |
Previous |
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AUD |
Employment Change (Jul) |
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15.0K |
7.3K |
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GBP |
Manufacturing Production (Jun) |
|
0.2% |
-0.6% |
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GBP |
BoE Inflation Report |
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GBP |
Interest Rate Decision (Aug) |
|
0.50% |
0.50% |
|
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GBP |
BoE MPC Meeting Minutes |
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|
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GBP |
BoE Gov Carney Speaks |
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Government Bond Auctions
Date Time Country
Aug 06 10:30 Spain Auctions Bonos
Aug 06 11:10 France Auctions OATs
Aug 10 17:30 Italy Announces details of BTP/CCTeu on 13 Aug
Aug 11 11:30 UK Auctions 0.125% 2058 I/L Gilt
Aug 12 11:30 Germany Eur 4bn Aug 2025 Bund
Aug 13 11:10 Italy Auctions BTPs/CCTeus