News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Commodities Update: As of 13:00, these are your best and worst performers based on the London trading schedule: Gold: 0.04% Silver: -1.18% Oil - US Crude: -2.76% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/ccCknbeGYC
  • Heads Up:🇺🇸 New Home Sales MoM (SEP) due at 14:00 GMT (15min) Expected: 2.8% Previous: 4.8% https://www.dailyfx.com/economic-calendar#2020-10-26
  • There is very little on the economic calendar this week to guide Sterling, while the latest coronavirus numbers show new infections around 20,000 while there have been another 151 fatalities. Get your $GBPUSD market update from @nickcawley1 here:https://t.co/Uj5UYAuwjE https://t.co/IooP7cx5PT
  • Indices Update: As of 13:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.04% France 40: -0.73% US 500: -1.05% Wall Street: -1.15% Germany 30: -2.46% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/3eOsVdmfov
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.84%, while traders in EUR/USD are at opposite extremes with 73.21%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/EwayAGFbnA
  • LIVE NOW: Join Technical Strategist @MBForex for his Weekly Strategy Webinar to review the setups we're tracking into the open of the week! https://t.co/chKtG7waxH
  • Forex Update: As of 12:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.02% 🇬🇧GBP: 0.00% 🇦🇺AUD: -0.13% 🇨🇭CHF: -0.29% 🇪🇺EUR: -0.35% 🇨🇦CAD: -0.50% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/mZiZqBCZLu
  • Heads Up:🇺🇸 Chicago Fed National Activity Index (SEP) due at 12:30 GMT (15min) Expected: 0.39 Previous: 0.79 https://www.dailyfx.com/economic-calendar#2020-10-26
  • Weekly Strategy Webinar starting in 15mins on DailyFX! https://t.co/lxd5fZnn4H
  • 🇲🇽 Economic Activity YoY (AUG) Actual: -9.4% Expected: -8.2% Previous: -9.9% https://www.dailyfx.com/economic-calendar#2020-10-26
Gold Prices May Rise if US GDP Data Boosts Fed Rate Cut Bets

Gold Prices May Rise if US GDP Data Boosts Fed Rate Cut Bets

2019-08-24 16:00:00
Dimitri Zabelin, Analyst
Share:
Gold 2 Hour Price Chart

FUNDAMENTAL FORECAST: BULLISH

  • Gold prices may gain if US GDP and consumption data misses estimates
  • Underperformance in the reports could boost Fed rate cut expectations
  • Dovish expectations may buoy appeal of non-interest-bearing assets e.g. gold

See our free guide to learn how to use economic news in your trading strategy!

Gold prices may get buoyed by a spike in Fed rate cut bets if US GDP data reinforces the notion that the world’s largest economy is slowing down and requires accommodative monetary policy. Market participants may then further pile on aggressive rate cut bets and push bond yields lower, making the appeal of holding a non-interest-bearing asset – like gold – comparatively more appealing.

Gold Prices, US 10-Year Bond Yields

XAUUSD Price Chart

Gold chart created using TradingView

Since February, US economic data has been tending to underperform relative to economists’ expectations. Ongoing US-China trade war negotiations have severely hampered cross-border investment. That has put a sour taste in the mouths of businesses skeptical to expand their enterprises if demand is lacking. Worries about a global slowdown have also proven to be contagious and have undermined inflationary pressure.

What are the five fundamental factors undermining global growth?

Traders will also be closely watching the release of personal consumption data. This is not surprising considering consumption accounts for well over 70 percent of US economic growth. Rising recession fears could spill over and negatively impact consumers that are hesitant to spend more freely in anticipation of hard times ahead. In turn, this could undermine inflation prospects further and boost the case for easing, lifting gold prices.

Overnight index swaps are currently pricing in a 97 percent chance of a 25 basis-point cut at the next FOMC meeting in September, while the probability for a 50 basis-point cut is at 57 percent. However, there appears to be a discrepancy between market expectations and the far more reserved view that the Fed has actually conveyed. If traders are forced to reprice bets closer to the scenario that the central bank envisions, gold prices may suffer.

GOLD TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES