Gold futures prices fell
Gold futures prices fell in Asian trade Wednesday as traders began to taking profit from precious metals, the market is now being cautious monetary policy response to global potential impacts.
On the Comex division of the New York Mercantile Exchange, gold for December delivery dropped 0.17% to $ 1,370.25 per troy ounce.
Silver futures for September delivery fell 0.14% to $ 20.672 per troy ounce, while copper for September delivery was flat at $ 2.207 per pound.
Overnight, gold jumped on Tuesday, jumped more than $ 10 per ounce to test 28-month highs, as the dollar slumped to its lowest level since late June and inflation remains relatively weak, potentially delaying the time of the latest interest rate hike Federal Reserve.
Gold has now closed higher in six consecutive sessions.
On Tuesday morning, the US Bureau of Economic Analysis (BEA) said personal consumption expenditures (PCE) rose 0.1% in June, slightly below the consensus forecast of a rise of 0.2% following an increase of 0.2% from the previous month. The advantage is reflected by the uptick in spending on gas, electricity and health services, which were partially offset by a decrease in spending on new vehicles. Over the past 12 months, the PCE price index has increased by 0.9% – remaining unchanged from the years exhibited gains in May.
Core PCE Index, which strips out volatile food and energy prices, edged up by 0.1% in June, in line with consensus forecasts and below the 0.2% gain in May. On an annual basis, the core personal consumption expenditures rose 1.6%, unchanged from the level of May. At the Federal Open Market Committee monetary policy meeting (FOMC) last week in July, the Committee said that market-based measures of inflation continues to remain low, because the core PCE index hovering below the targeted long-term goal of 2%.
While delivering a speech monetary policy and global economy, Beijing, Dallas Fed President Rob Kaplan urged the US central bank to raise rates in a “gradual and patients,” amid the continuing challenges facing the US economy. A day earlier, Kaplan told Bloomberg in a television interview that a rate hike in September is still on the table. Last week, the FOMC left the benchmark Federal Funds rate unchanged at a level between 0.25 and 0.50% for the fifth consecutive meeting.
Every rate hike this year is seen as bearish for gold, which is struggling to compete than high yield bearing asset in the period rising rate environment.
Technically
Resistance: 1363.35 1363.92 1364.25 High / Low: 1367.06 / 1345.86
Support: 1362.13 1361.04 1360.17 Running Price: 1363.15
Comment: For intraday trade today suggest Sell at 1358.85; stop loss at 1360.05; targets at 1356.85.
Yen weakened in trading
The yen weakened on Wednesday trading in the Asian session as the minutes of a meeting of the Bank of Japan officials in June that refers to the negative impacts of tilapia interest rates now.
USD / JPY was changing hands at 101.12, up 0.24%. AUD / USD was changing hands at 0.7599, down 0.14%.
Besides, in New Zealand, the labor cost index rose 1.8% in the second quarter year-on-year as expected. NZD / USD was trading at 0.7208, down 0.48%.
Also, AIG services index in Australia for July rose to 53.9, up from 51.3. AI Group Chief Executive Innes Willox said that for the lower level passed by the bank, the decision by the Reserve Bank to cut the cash rate Tuesday should give a boost to business and consumer demand in the services sub-sectors that are currently lagging.
Then Caixin services PMI for July in China is due to the expected reading of 52.0.
Overnight, USD / JPY fell sharply, sliding to a near one-year lows, as the Japanese cabinet prime minister Shinzo Abe approved a massive stimulus package on Tuesday in a last-ditch attempt obviously to increase inflation remains low.
Abe economic stimulus plan approved just days after the Bank of Japan surprised markets by implementing measures only modest easing in a closely-watched meeting last week.
$ 274 billion stimulus is one of the largest Japanese government since the financial crisis and comes amid growing sentiment that the Japanese economy will need to rely on fiscal, not monetary policy in order to prevent deflation.
As part of the plan, the government will provide cash subsidies to 22 million low-income populations, while providing support to communities in the southern region of the country, hit by a devastating earthquake in the spring. In particular, the government will only give about ¥ 7500000000000 direct spending, Reuters reported. The dollar fell more than 3% against the yen on Friday after the Bank of Japan rocked the market with only approved the purchase of ETF limited to a closely-watched meeting in Tokyo.
Elsewhere, the US Bureau of Economic Analysis (BEA) said on Tuesday morning that personal consumption expenditures (PCE) rose 0.1% in June, slightly below the consensus forecast of a rise of 0.2% following an increase of 0.2% from the previous month , The advantage is reflected by the uptick in spending on gas, electricity and health services, which were partially offset by a decrease in spending on new vehicles. Over the past 12 months, the PCE price index has increased by 0.9% – remaining unchanged from the years exhibited gains in May.
Core PCE Index, which strips out volatile food and energy prices, edged up by 0.1% in June, in line with consensus forecasts and below the 0.2% gain in May. On an annual basis, the core personal consumption expenditures rose 1.6%, unchanged from the level of May. At the Federal Open Market Committee monetary policy meeting (FOMC) last week in July, the Committee said that market-based measures of inflation continues to remain low, because the core PCE index hovering below the targeted long-term goal of 2%.
While delivering a speech monetary policy and global economy, Beijing, Dallas Fed President Rob Kaplan urged the US central bank to raise rates in a “gradual and patients,” amid the continuing challenges facing the US economy. A day earlier, Kaplan told Bloomberg in a television interview that a rate hike in September is still on the table.
A few hours later, Atlanta Fed President Dennis Lockhart said in an exclusive interview with CNBC that he did not rule out the possibility of a rate hike when the FOMC next meets in September. Lockhart also stressed that the Committee had been hesitant to sell bonds from its portfolio in recent months because it would create an implicit tightening, putting upward pressure on interest rates.
Last week, the FOMC left the benchmark Federal Funds rate unchanged at a level between 0.25 and 0.50% for the fifth consecutive meeting.
Technically
Resistance: 101.46 101.65 101.98 High / Low: 102.81 / 100.65
Support: Running 100.97 101.04 101.16 Price: 101.29
Comment: For intraday trade today suggest Buy at 101.38; stop loss at 101.32; targets at 101.48.
