©: abluecup / 123RF Stock Photo

Gold Bounces Off Lows

July 11th, 2017 by

With market conditions still appearing bearish for gold, the yellow metal managed to rebound from its overnight lows. Around 9:45 am ET, spot gold was trading at $1,211.50 an ounce in New York while spot silver was up 2¢ to $15.66/oz. Both platinum and palladium each lost a little ground in early trading, bringing the historically thin spread between the two metals even closer.

©: abluecup / 123RF Stock Photo

©: abluecup / 123RF Stock Photo

Although the markets’ attention seems to have turned toward second-quarter earnings on Wall St, there will still be some interest in Fed Chair Janet Yellen’s testimony before Congressional committees this week.

Even as gold threatens to make more room to fall as it approaches the key support line at $1,200/oz, the overlooked global turmoil in terms of military threats (Syrian conflict, North Korea) as well as economic ones (the eroding international trade order) could generate a snap-back in safe haven demand on any given day.

First, the closing numbers for Monday, July 11th:

Gold: $1,214/oz (+$1.50/oz, +0.16%)
Silver: $15.64/oz (+7¢, +0.45%)
Platinum: $899/oz (-$7, -0.77%)
Palladium: $836/oz (+$2, +0.24%)

The global stock markets were mixed on Tuesday morning although investor sentiment across the equities trade has been fairly strong as of late. Shares in Shanghai were down 0.3%, but rose 0.6% in Tokyo while the Hang Seng index in Hong Kong added 1.5%. The FTSE 100 on London lost 0.4% this morning to join other European bourses in negative territory. The Nasdaq rose 0.3% in early trading although the other two major U.S. indices, the Dow Jones and the S&P 500, were both unchanged.

Ms. Yellen Goes to Washington

Fed Chair Janet Yellen testifying before Congress (photo: Federal Reserve)

Fed Chair Janet Yellen testifying before Congress (photo: Federal Reserve)

Well, it’s worth noting that Chair Yellen and the Fed headquarters, the Eccles Building, are already located in the nation’s capital. So really Ms. Yellen will merely need to walk a couple blocks to begin her two-day meeting with legislators on Wednesday. First, Yellen will give testimony about the economy and Fed policy to the powerful Senate Banking Committee, followed by an appearance before the House Financial Services Committee. The Fed Chair meets with these two committees twice per year; Yellen last testified in front of Congress in February.

The markets (both domestically and around the world) will no doubt put a good amount of stock in what Yellen says this week. While she is likely to dance around any specifics, she can still provide some insight into how the FOMC is looking at its plan to continue to raise interest rates — perhaps at a faster clip than in the previous two years. However, there is growing dissent among more dovish Fed members who are concerned about hiking rates given the stagnant pace of inflation.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.