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USAGOLD/Peter Grant/05-25-17
Gold continues to consolidate within the recent range, underpinned by political, geopolitical and growth risks, as well as a generally weak dollar. Capping the upside is persistently buoyant stocks and the belief that the Fed will still raise rates in June, despite the aforementioned risks.
Those rate hike expectations remain elevated above 80%, despite the FOMC minutes revealing that the Fed turned much more ambiguous at the May meeting. The Fed expressed concerns about weak growth, slowing inflation, elevated asset valuations and geopolitical tensions. While largely dismissed as transitory, they stressed the data dependency of further tightening.
Initial jobless claims edged higher to 234k last week, below expectations. The trade deficit expanded to -$67.5 bln in April. The Bloomberg Consumer Comfort Index and M2 are out later and we’ll hear FedSpeak from Brainard and Bullard.
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