Gold Fundamental Forecast – July 28, 2016
Gold futures are trading sideways-to-lower shortly before the regular session opening with the December Comex futures contract closing at $1327.20, down $1.10 or -0.08%. Spot gold slipped 0.1 percent to $1317.96 per ounce.
Gold prices are likely to remain directionless into the Fed meeting and could remain in a range shortly after the central bank releases its monetary policy statement at 1800 GMT if the Fed remains neutral about the timing of the next rate hike. Going into the two-day meeting, the odds of a July rate hike were remote.
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With the central bank likely to keep interest rates unchanged at this time, the main focus will be on whether the economy is strong enough to sustain a rate hike in September or December. Certainly investors will be pouring over Wednesday’s statement for any clues as to if or when the Fed will act on interest rates.
Concerns over the impact of Brexit and the clear divergences between the Fed and several other central banks will be considered by the Fed in reaching its decision. The central bank does not want to be responsible for causing excessive volatility in the markets.
Gold is likely to feel pressure if a hawkish Fed statement drives up the U.S. Dollar. Higher interest rates will make the dollar a more attractive investment and gold as less desirable asset because it pays no dividend.
A dovish or ambiguous Fed could create uncertainty in the markets which tends to be supportive for gold. Additionally, any substantial weakness in the U.S. equity markets could also underpin gold if the selling is strong enough to cause investors to park their profits in gold.
FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.
Today’s economic releases:
| Cur. | Event | Actual | Forecast | Previous | |
| AUD | CPI (YoY) (Q2) | 1.0% | 1.1% | 1.3% | |
| AUD | CPI (QoQ) (Q2) | 0.4% | 0.4% | -0.2% | |
| AUD | Trimmed Mean CPI (QoQ) (Q2) | 0.5% | 0.4% | 0.2% | |
| EUR | GfK German Consumer Climate (Aug) | 10.0 | 9.9 | 10.1 | |
| GBP | GDP (QoQ) (Q2) | 0.6% | 0.4% | 0.4% | |
| GBP | GDP (YoY) (Q2) | 2.2% | 2.0% | 2.0% | |
| USD | Core Durable Goods Orders (MoM) (Jun) | 0.3% | -0.3% | ||
| USD | Durable Goods Orders (MoM) (Jun) | -1.1% | -2.3% | ||
| USD | Pending Home Sales (MoM) (Jun) | 1.4% | -3.7% | ||
| USD | Crude Oil Inventories | -2.257M | -2.342M | ||
| USD | Cushing Crude Oil Inventories | 0.189M | |||
| USD | FOMC Statement | ||||
| USD | Fed Interest Rate Decision | 0.50% | 0.50% |
Upcoming Economic Events that you should be monitoring:
Thursday, July 28, 2016
| Cur. | Event | Actual | Forecast | Previous | |
| GBP | Nationwide HPI (MoM) (Jul) | -0.2% | 0.2% | ||
| GBP | Nationwide HPI (YoY) (Jul) | 4.5% | 5.1% | ||
| EUR | German Unemployment Change (Jul) | -3K | -6K | ||
| EUR | German Unemployment Rate (Jul) | 6.1% | 6.1% | ||
| EUR | German CPI (MoM) (Jul) | 0.2% | 0.1% | ||
| USD | Goods Trade Balance (Jun) | -61.10B | -60.59B | ||
| USD | Initial Jobless Claims | 260K | 253K |
Government Bond Auctions
Date/Time Country Type
Jul 27 11:30 Germany Eur 1bn 2.5% Aug 2046 Bund
Jul 28 11:10 Italy Holds bond auction