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    Gold inter-markets: between the Fed and ‘Brexit’ Pablo Piovano

    Prices for the troy ounce of the precious metal continue to slip on Wednesday, retracing yesterday’s spike to multi-week tops in levels just shy of the critical $1,300 handle and just a tad lower than 2016 peak at $1,304 posted on May 2.The recent upbeat tone in bullion has been attached to increasing risk aversion sentiment derived from mounting concerns over the likeliness of the UK leaving the European Union at the Referendum on June 23, all according to latest poll results.Today’s auspicious results from the UK’s labour market figures plus a recovery of yields in Gilts has added to a pick-up in the risk-associated space, triggering the ongoing correction lower in the yellow metal to the area of $1,283 as of writing.Helping the above, volatility tracked by the VIX gauge remains on the downside, while Fed Funds rate contracts appears steady ahead of the Fed gathering and Yellen’s presser.On another direction, today’s FOMC meeting, and hence USD, will take centre stage later in the NA session. While a rate hike today is already ‘off the table’, market participants will closely follow the Committee’s projections on rate hikes (the ‘dots-plot’) and any change in the tone regarding the economy.To sum up, Gold is expected to extend its ‘wait-and-see’ mode against the backdrop of increasing cautiousness regarding the FOMC event, while the current selling pressure could gather further steam in case of a USD-supportive bias at the meeting today. 


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