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GOLD ON LONGEST LOOSING RUN

Harvest Global Markets :

Bears in the gold market have successfully chased bulls after gold prices slipped for the third straight week. On September 1st, gold futures slumped below $ 1700, i.e. hitting a low of $1690. The main combatant of the shiny metal is the dangerous dollar which dominated the market and peaked at a two-decade high of 109.48.

The market increased the likelihood of an aggressive interest rate hike after Federal Reserve Bank’s Chairman stated that monetary policy may not experience any slacks until the red-hot inflation has been completely defeated (the current inflation rate of the U.S is hovering around 8.5%). The latest calculations by analysts show a 75% probability for a 75 basis interest rate surge. Moreover, New York Federal Bank’s Chief indicated that the interest rate may surpass 3.5% in 2023.

Other factors adding to the misery of the gold are the U.S economy’s robust job market and optimistic consumer confidence. Consumer Confidence Index released on August, 30th depicted expectations of strong household consumption. Consumer Confidence documented reading of 103.2, i.e. much higher than the forecast of 97.9 and the previous month’s data of 95.3. Furthermore, Jolts Opening Report topped the forecast of 10.475 thousand by hitting 11.24 thousand. All these cheerful indicators hint that the economy still has firm roots to absorb another bold interest rate climb.

Presently, investors are impatiently waiting for the famous Non-Farm Payroll Report, which will be released today at 1730 HRS PKT. The market predicts Non-Farm Payroll data to be 295,000; however, if the actual data exceeds the expectations, gold prices could may fall further from the ladder till $1650- a key support level.

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