Golden call points:
US monetary policy is still in question, and many are looking for a signal when this first step away from pandemic policy may occur. Each FOMC interest rate decision sees journalists analyzing President Powell’s specific wording in an attempt to find signs of the next step. But so far nothing has really been shown. Inflation is at a high level above the Fed’s 2% target, but as they have told us countless times, they believe it is temporary and will take care of itself. By contrast, employment is well below pre-pandemic levels and remains high, requiring the Fed to make “significant progress” in looking at policy change.
It will be in the spotlight this week with the release of non-agricultural payroll numbers on Friday.
Gold has the potential to rise, as I watched last week. June was a difficult outing Gold but in July 50% of this step was seen backwards. Following last week’s FOMC interest rate decision, the bulls pushed prices back into this resistance zone, highlighting how the terrible Fed could continue to push gold prices in the long run.
The big question right now is whether the Fed will get that ammunition bad, and Friday’s jobs report is key as it is the last NFP report ahead of the Jackson Hole Economic Symposium later this month. The absence of the title and / or the rise in unemployment can be seen as a sad signal, leading to strength in metals and perhaps even new weakness. US dollar.
Golden four-hour price chart
– Written James Stanley, Senior strategist For DailyFX.com
Get in touch and follow James Twitter: @JStanleyFX