gold weekly bns

Gold Fundamental Analysis – Forecast for the week of September 19, 2016

Gold ended the week at the bottom of its trading range as traders prepare for the BoJ and the FOMC as the odds of a rate increase this year grows. Gold closed the week at 1313.25 down 1.27% for the week and is down almost 24% on the year to date basis. Gold is a strong buy moving into the next week. Buy on dips. Gold touched its lowest level since the UK voted to leave the European Union back in June as it just managed to keep its head above the US$1,300 mark on Wednesday.

The precious metal did recover somewhat in the afternoon session to actually post a small gain, although it remains under pressure from renewed confidence that the Federal Reserve will raise interest rates before 2016 is out. The Fed has previously said that it would seriously consider upping rates should US data continue to point towards a recovering economy.

A rate rise would have a negative impact on the price of gold as it would increase the opportunity cost of holding non-yielding bullion, while simultaneously boosting the dollar, which the yellow metal is priced in, making it more expensive to foreign currencies.

A hike would also suggest to markets that the global economy is in better shape, reducing the need for ‘safe-haven’ assets such as gold.

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This Week’s Economic Events That You Should Be Monitoring:

Date Country Name Volatility Previous
9/20/2016 AUD RBA Meeting’s Minutes 3
9/20/2016 CAD BoC Governor Poloz 3
9/21/2016 AUD Mid-Year Economic Outlook 3
9/21/2016 JPY BoJ Interest Rate Decision 3 -0.1
9/21/2016 JPY BoJ Monetary Policy Statement 3
9/21/2016 JPY BoJ Press Conference 3
9/21/2016 USD FOMC Economic Projections 3
9/21/2016 USD Fed’s Monetary Policy Statement 3
9/21/2016 USD Fed Interest Rate Decision 3 0.5
9/21/2016 USD FOMC Press conference 3
9/21/2016 NZD RBNZ Interest Rate Decision 3 2
9/22/2016 EUR ECB President Draghi’s Speech 3
9/23/2016 AUD RBA’s Governor Lowe Speech 3

Government Bond Auctions

Date Time           Country               Auction

Sep 19 11:00 Belgium Eur 2.8-3.5bn 4.5% Mar 2026,

Sep 20 11:30 UK Gbp 2.5bn 1.5% Jul 2047 Gilt

Sep 21 10:30 Denmark Holds bond auction

Sep 21 11:03 Sweden Sek 2bn 4.25% Feb 2019 & Sek 1.5bn 1.5% Nov 2023 bonds

Sep 21 11:30 Germany Eur 4bn 0% Oct 2021 Bobl

Sep 22 17:20 Italy Announces details of bond auction

Sep 22 19:00 US Usd 11bn 0.125% Jul 2026 TIP

Sep 26 11:30 Germany Eur 1.5bn Sep 2017 Bubill

Sep 26 13:00 Norway Details of bond auction on Sep 28

Sep 27 11:00 Netherlands Eur 0.75-1.25bn 4% Jan 2037 DSL

Sep 27 11:10 Italy Holds zero coupon/BTP€i auction

Sep 28 11:05 Norway Holds bond auction

Sep 28 11:30 Germany Eur 4bn Sep 2018 Schatz

Sep 29 11:03 Sweden Holds I/L bond auction