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USAGOLD/Peter A. Grant/03-21-17
Gold is consolidating near the high end of the recent range, buoyed by a weaker dollar. More than half of the decline from late-February into the FOMC meeting — driven largely by hawkish FedSpeak — has now been retraced. The 61.8% retracement level was pressured yesterday.
The rebound is being driven by the fact that the reality of the FOMC statement and projections did not live up to the hawkish hype. FedSpeak yesterday from Evans and Harker suggests the Fed is going to give this another go, and try to rebuild inflation and rate hike expectations. At least initially, investors don’t seem to be buying it.
KC Fed’s Esther George and Cleveland Fed’s Loretta Mester speak later today. Both lean hawkish to begin with, so I would look for them to suggest four hikes remain on the table for this year.
U.S. Q4 current account gap narrowed to -$112.4 bln, well inside expectations of -$128.2 bln, vs revised -$116.0 bln in Q3 (was -$113.0 bln). This is likely to result in a positive Q4 GDP revision, but it strikes me as a bit odd. ZeroHedge noted that it was an 8 standard deviation miss! That’s pretty huge, so color me skeptical.
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