BBH: U.S. Dollar Rebounds In Aftermath Of FOMC Minutes
Gold has been under pressure since thestart of Asia-Pacific trading as the U.S. dollar starts to recoup some ofWednesday’s losses, says MKS (Switzerland) S.A. “The USD strength persistedthroughout the [Asia-Pacific] morning and all the precious complex continued tosell off unabated leading into the SGE [Shanghai Gold Exchange] open,” MKSsays. “Right on the open, the gold shot down to $1,191.50 although somephysical demand did present itself down there....There has been no sign of the USDretreating and the metals remain close to the lows of the day....” At 8 a.m. EDT,spot gold was down $5.70 to $1,189.65 an ounce. The spot U.S. dollar index wasup 0.138 point to 95.284.
By Allen Sykoraof Kitco News; asykora@kitco.com
BBH: U.S. Dollar Rebounds In Aftermath OfFOMC Minutes
Thursday August 23, 2018 08:25
The U.S. dollar is rebounding against most major andemerging-market currencies in the wake of the Wednesday release of Federal OpenMarket Committee minutes, says Brown Brothers Harriman. “The minutes confirmedthe high probability of a hike next month, and there was little to cast doubton the likelihood of a December hike as well,” BBH says. “The minutes revealeda more confident Fed due to the strong labor market, robust growth and aninflation rate at the target.” BBH notes that Fed officials areconcerned that tariffs and trade tensions risk slowing the economy and boostingprices. “However, there appears to be little tangible impact yet,but the Fed is mindful,” BBH says. Meanwhile, the U.S. and China have goneforward with 25% tariffs on $16 billion of each other's goods even though tradetalks are set to continue Thursday. “Part of the low probability ofanything meaningful coming out of the negotiations is that [U.S. PresidentDonald] Trump rejected the deal worked out by the Treasury Department earlierin the year, when China was prepared to step up its purchases of U.S. goods,”BBH says. “No one else's commitments seem to matter but the President's, whichis why a resolution is only possible by a Trump-Xi meeting that couldtentatively take place in November.” Just before 8 a.m. EDT, the Septemberdollar index was up 0.149 point to 95.200. Metals traders tend to monitordollar moves since base and precious metals alike often move inversely to theU.S. currency.
By Allen Sykoraof Kitco News; asykora@kitco.com
Commerzbank: Gold Prices Weak In EuroTerms
Thursday August 23, 2018 08:25
While gold issofter in U.S. dollar terms early in the Thursday New York trading session, themetal’s weakness against the euro is “particularly remarkable,” Commerzbank says. Gold hasfallen below ?,?1,030 per troy ounce, and “on a closing price basis, this wouldmark its lowest level since February 2016,” Commerzbank says. “This is hard tounderstand in view of negative real interest rates in the euro zone andemerging speculation that Bundesbank President [Jens] Weidmann probably willnot succeed ECB [European Central Bank] President [Mario] Draghi. After all, ifanother monetary policy ‘dove,’ whose main concern is holding the monetaryunion together, ends up at the helm of the ECB rather than a ‘hawk’ who focusesfirst and foremost on monetary stability and thus keeps a close eye oninflation risks, the euro zone is likely to become more and more a transferunion, with the euro characterized by latent weakness. In this situation, thegold price in euros should rise sharply.” Around 8 a.m. EDT, gold wasdown 0.31% to ?,?1,027.76 an ounce.
By Allen SykoraFor Kitco News
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