Gold benefited from declines in the US dollar to add $3.90 in the Asian session after a strong trading day on Tuesday. Gold remains within its trading
The central bank is widely expected to raise the short-term fed funds in December, marking the first increase in almost a decade. But bond-market futures suggest rates will only rise an additional 50 basis points in 2016.Goldman’s top economists assert the Fed is more likely to boost rates by 1% next year. They predict the U.S. will continue to grow fast enough to spur the Fed to raise rates by an average of once a quarter. They point to a tight labor market, steady consumer spending, stronger home sales and construction and a likely increase in government outlays, among other things.
Data on Tuesday supported views of a December rate hike. The U.S. economy grew at a healthier clip in the third quarter than initially thought. Traders will be eyeing more U.S. data due today, including weekly jobless claims and October new home sales, to gauge the strength of the economy.
Gold is heading to test a resistance level at 1081.19 for the second time as upward momentum gathers strength. A breach is possible and that will lead prices up to the above region, capped by weekly high of 1088. Long-term bearish trend has not changed while gold prices remain in between a 6-year low and a crowded support area in 1085-1098.
The unexpected upset in the geopolitical scene sent oil products soaring as the events took place in the Middle East although it will have no long term effects speculators saw knee jerked sending oil prices much higher. The sudden advance in oil price helped to lift up copper and metals. Copper retraced above the 2.0650 support level for the first time in two days. If a breach of support does not occur today, there will be hope for copper price to hold this level. Nevertheless, hedge funds are intent on bearish bets as net long positions of copper on the London Metal Exchange nearly halved for the week ended November 20.