Gold
Gold eased below USD1,500/oz as risk appetite grew on the U.S.-China positive trade news flow while yields rose as the ECB failed to match the market's overly dovish rate cut expectations.
The immediate focus of the gold market may now shit to the FOMC meeting next week and its impact on the USD. While a fed rate cut could help gold but other factors including the COMEX position overhang and the gradual rise in yields, are negative for bullion while a resilient stock market equally tarnishes golds glittering appeal.
The great Fed divides
There is some support 50 basis point cut. However, because half the members are arguing for no cut at all, that too remains an outside possibility.
However, conspiracy theories aside the Gold market have priced in 100% probability of a 25-basis point cut where although out will trigger a massive symmetrical response.
Market view
If the confluence of diminishing risks continues, and central banks continue to walk back the markets dovish rate cut expectations, gold may ease further.
Long positions on the Comex remain very high and may trigger further profit-taking from recent longs
In the news
As a major retail broker in Asia Pacific, we’re excited about the prospects of the CME Group (NASDAQ:CME) to launch a new Shanghai Gold futures contract in October. While the SGE, the world's largest physical gold exchange, will begin new T+N contracts linked to COMEX Gold Futures Asia Spot Price.