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USAGOLD/Peter Grant/06-19-17
Gold is modestly lower to start the week, eking out a new 3-week low. The yellow metal is being weighed by a firmer dollar, and improved risk appetite that has lifted stocks.
Hawkish comments from NY Fed President Dudley, suggest that the Fed will continue on the tightening path. Despite recent soft data, Dudley said that “halting (the) tightening cycle would imperil the economy.”
Dudley believes that inflation will pick-up as the labor market continues to improve. However, the jobless rate hit a 16-year low in May at 4.3%. How much room for improvement is there really?
If Dudley’s comment are indicative of FedSpeak moving forward, it means they are trying to keep a September hike on the table. We’ll hear from Chicago Fed’s Evans this evening.
The U.S. economic calendar is empty today. In fact, this week is pretty quiet.
Brexit negotiations began today. In light of the recent political weakening of Theresa May, an event that was already fraught with uncertainty is now even more uncertain. This should help limit the downside in gold.
Additional underpinning for gold is found in the broad political and geopolitical uncertainty. With the Trump economic agenda foundering and the Fed proceeding with the removal of accommodations, the U.S. economy may be in considerable jeopardy.
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