Pinto Beans & Penny Stocks 2020

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Gold Pauses After Starting Week with Sharp Losses

Posted 7 minutes ago

Gold is almost unchanged in the Tuesday session. In North American trade, spot gold is trading at $1222.92 per ounce. In the US, there are no events, as US markets are off for Independence Day. On Wednesday, the Federal Reserve will publish the minutes of its June policy meeting.

It was an inauspicious start to the trading week, as gold dropped sharply on Monday, down 1.5%. The metal dropped below $1219, marking its lowest level since May 11. Gold is down 4.4% since Thursday, when the metal appeared headed to break above the symbolic $1300 level. The week started with good news from the manufacturing sector, as ISM Manufacturing PMI improved to 57.8, its highest level since November 2014. Global economic conditions have improved, and a stronger demand for US exports has boosted the manufacturing sector.

Interest rates are inversely related to gold prices, so gold investors and traders are following the Federal Reserve closely. Will the Fed make good on its forecast to raise rates for a third time in 2017? The markets remain somewhat skeptical, as the odds of a rate hike in December have fallen to 47%, down from 53% last week, according to the CME Group. With the US economy giving a mediocre performance in the first quarter, and inflation levels remains low, there are Fed policymakers who are currently lukewarm to the idea of raising rates again this year. Key economic indicators have not looked particularly sharp in the second quarter, notably housing and consumer spending numbers. If inflation numbers do not improve and GDP reports for Q2 remain soft, the odds of a December hike will drop even further, which could translate into higher gold prices.

http://www.marketpulse.com/20170704/gold-pauses-starting-week-sharp-losses/