Gold 22 June
For my friends:
Well, good to be back, I will be posting maybe not daily but we will see how it goes with my time. I might stream my trades as you know so you will be able to see it live and see me trade. I will stream random from trading or what I like doing so don’t just expect trading that is just a part of my day hahah.
Today we have Jobless Claims and FOMC.
If Jobless claims data is higher Gold should go up cause its deflationary But if Jobless claims is lower Gold should go down since its inflationary.
As for FOMC I will wait to see and I will write a report later
BOE:
Economists and investors expect the Monetary Policy Committee to push ahead with another quarter-point increase in its key rate to 4.75%, the 13th rise in what’s now likely to be an extension of the quickest hiking cycle in more than three decades.
However, another shock inflation reading on Wednesday has opened the door to a bigger half-point increase, the first since February. Money markets place a 40% chance on a bigger hike to 5%.
6% Rates Are Now Fully Priced In By Money Markets
All eyes will be on how BOE Governor Andrew Bailey and his colleagues address a surge in bets for UK interest rates reaching as high as 6%, which would be the highest in two decades. Rocketing rate expectations have renewed an ascent in mortgage costs and a rush by lenders to withdraw home loan products, turning the screw on Britain’s already squeezed households.
The BOE could be forced to confront the huge surge in investor bets on higher interest rates in recent weeks following the surprisingly strong price and wage data. Shortly before the May meeting, investors expected rates to peak at just below 5%. Since then, surprisingly strong signs of inflation have prompted that betting to move toward 6%.
The minutes of the BOE’s last meeting promised further tightening in policy if there was evidence of “more persistent pressures.” This time, the BOE is facing a trickier balancing act after the market surge.
The debate over the BOE’s reversal of quantitative easing is set to come into view ahead of a decision on the run-off of its balance sheet of bonds due in September. The BOE bought as much as £895 billion of bonds to keep a lid on market interest rates since the global financial crisis and is now winding down that program in a move dubbed quantitative tightening.
Deputy Governor Dave Ramsden hinted last month that active sales of gilts could increase in the second year with the BOE currently reducing its bond portfolio at a pace of around £80 billion per year. However, Goldman Sachs argued earlier this week that the BOE will in fact cut the pace given the market volatility and amount of gilts investors need to absorb.
Gold vs Rate Hikes
Gold steadied at $1.933.63 an ounce, while gold futures fell slightly to $1,943.80 an ounce by 20:13 ET (00:13 GMT). Both instruments briefly slid below $1,920 and $1,930 an ounce, respectively, after Powell’s comments on Wednesday.
While the Fed chief gave no direct signals on the next rate hike, his stance on Inflation remaining too high, coupled with hawkish signals from the Fed last week, reinforced expectations for an at least 25 basis point hike in July.
FED FUND PRICES show that markets are pricing in an over 70% chance the Fed will raise rates in July.
The prospect of further increases in U.S. interest rates has weighed heavily on gold over the past month, given that it increases the opportunity cost of holding bullion.
While the yellow metal has held a trading range of between $1,930 and $2,000 for the past month, analysts expect a breakout towards the downside, especially as the DOLLAR strengthens amid uncertainty over the Fed.
Summary:
We are waiting to see what will be the main movement of the market so as soon as we get that data I will write about it.
Markets are now awaiting more cues on monetary policy as Powell testifies before the Senate Banking Committee later on today. But the Fed chief’s comments, coupled with a hawkish outlook from the central bank last week, saw broader markets positioning for more interest rate hikes in the coming months.
Well, good to be back, I will be posting maybe not daily but we will see how it goes with my time. I might stream my trades as you know so you will be able to see it live and see me trade. I will stream random from trading or what I like doing so don’t just expect trading that is just a part of my day hahah.
Today we have Jobless Claims and FOMC.
If Jobless claims data is higher Gold should go up cause its deflationary But if Jobless claims is lower Gold should go down since its inflationary.
As for FOMC I will wait to see and I will write a report later
BOE:
Economists and investors expect the Monetary Policy Committee to push ahead with another quarter-point increase in its key rate to 4.75%, the 13th rise in what’s now likely to be an extension of the quickest hiking cycle in more than three decades.
However, another shock inflation reading on Wednesday has opened the door to a bigger half-point increase, the first since February. Money markets place a 40% chance on a bigger hike to 5%.
6% Rates Are Now Fully Priced In By Money Markets
All eyes will be on how BOE Governor Andrew Bailey and his colleagues address a surge in bets for UK interest rates reaching as high as 6%, which would be the highest in two decades. Rocketing rate expectations have renewed an ascent in mortgage costs and a rush by lenders to withdraw home loan products, turning the screw on Britain’s already squeezed households.
The BOE could be forced to confront the huge surge in investor bets on higher interest rates in recent weeks following the surprisingly strong price and wage data. Shortly before the May meeting, investors expected rates to peak at just below 5%. Since then, surprisingly strong signs of inflation have prompted that betting to move toward 6%.
The minutes of the BOE’s last meeting promised further tightening in policy if there was evidence of “more persistent pressures.” This time, the BOE is facing a trickier balancing act after the market surge.
The debate over the BOE’s reversal of quantitative easing is set to come into view ahead of a decision on the run-off of its balance sheet of bonds due in September. The BOE bought as much as £895 billion of bonds to keep a lid on market interest rates since the global financial crisis and is now winding down that program in a move dubbed quantitative tightening.
Deputy Governor Dave Ramsden hinted last month that active sales of gilts could increase in the second year with the BOE currently reducing its bond portfolio at a pace of around £80 billion per year. However, Goldman Sachs argued earlier this week that the BOE will in fact cut the pace given the market volatility and amount of gilts investors need to absorb.
Gold vs Rate Hikes
Gold steadied at $1.933.63 an ounce, while gold futures fell slightly to $1,943.80 an ounce by 20:13 ET (00:13 GMT). Both instruments briefly slid below $1,920 and $1,930 an ounce, respectively, after Powell’s comments on Wednesday.
While the Fed chief gave no direct signals on the next rate hike, his stance on Inflation remaining too high, coupled with hawkish signals from the Fed last week, reinforced expectations for an at least 25 basis point hike in July.
FED FUND PRICES show that markets are pricing in an over 70% chance the Fed will raise rates in July.
The prospect of further increases in U.S. interest rates has weighed heavily on gold over the past month, given that it increases the opportunity cost of holding bullion.
While the yellow metal has held a trading range of between $1,930 and $2,000 for the past month, analysts expect a breakout towards the downside, especially as the DOLLAR strengthens amid uncertainty over the Fed.
Summary:
We are waiting to see what will be the main movement of the market so as soon as we get that data I will write about it.
Markets are now awaiting more cues on monetary policy as Powell testifies before the Senate Banking Committee later on today. But the Fed chief’s comments, coupled with a hawkish outlook from the central bank last week, saw broader markets positioning for more interest rate hikes in the coming months.
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