Gold Rates - RSBL

Gold and dollar have long been inversely proportional to each other. Gold is the quintessential “anti-dollar” — a place to turn for those who distrust fiat currency — so it seemed natural that prices would rise in a world of low real interest rates and cheap dollars.

The unraveling of the relationship between gold and real interest rates could be a paradigm shift for the precious metal, leaving investors struggling to calculate its “fair value” in a world where the old equations don’t seem to apply. It’s also raising questions about if and when the old dynamic might reassert itself – or whether it already has, just from a new base.

Bullion hasn’t moved much, even as inflation-adjusted gold rates soared this year to the highest since the financial crisis. Real yields — measured by the 10-year Treasury inflation-protected securities, or TIPS, — jumped again on Thursday to the highest since 2009, while spot gold nudged down a mere 0.5% the same day. The last time real rates were this high, gold rates were about half the price.

U.S. 10-year bond yields at fresh 16-year highs as the U.S. dollar near a one-year high continues to keep a lid on the gold market; however, according to one market strategist, the precious metal's downside remains limited as economic uncertainty and rising U.S. debt provide solid support.

After last week’s monetary policy decision where the Federal Reserve left interest rates unchanged, it is clear the central bank is done raising interest rates.

Slightly hawkish Fed and global central banks are currently suppressing gold, although some signs of economic stress are also keeping the market supported overall.

Moreover, ECB hasn’t given any clarity on inflation trajectory going forward and now most FED members are expecting slow landing.

Gold has a bright future in the coming year, where market participants expect it to rise to a new all time high even if there is a mild recession in the global economy.

Along with growing economic uncertainty, growing deficit problems in the U.S. are also creating some support for gold as it will limit the Federal Reserve's monetary policy decisions after it raised interest rates at an unprecedented pace.

Gold has a solid long-term bullish support and   an impending government shutdown could create some near-term safe-haven demand for the precious metal

Looking to the New Year, the analysts said that they see gold prices pushing to $2,200 an ounce by the end of 2024 as investors realize how difficult it will be for central banks to bring core inflation down to their 2% targets.

There’s always the potential catalyst for a recession that could push investors to safe haven assets like gold. Supporting gold prices is also central bank buying, so the bottom hasn’t essentially fallen out for gold.

It's Data Packed Week - RSBL

Gold prices edged higher on Monday, helped by a retreat in the dollar and bond yields, while investors awaited a slew of U.S. economic data this week for more clues on interest rate outlook.

Gold has started the new week on a strong note as the FX market largely remains range-bound in part due to a UK holiday. It's up $7 to $1921 after touching $1925, which was the highest in more than two weeks.

The dollar eased against rivals, making gold less expensive for other currency holders. The benchmark 10-year Treasury yields held below their recent peak. 

Looking ahead, the precious metal will be very sensitive to incoming US economic reports, given the pledge by the Federal Reserve Bank (Fed) to proceed with caution after having already delivered 525 basis points of cumulative tightening since March 2022 in its most aggressive hiking cycle in four decades

This is the unofficial last week of summer for the U.S. Look for the marketplace to become more active next Tuesday, following the three-day U.S. Labor Day weekend holiday. This is a big week for U.S. economic reports, so traders and investors are likely to become at least a bit more tuned in as the week progresses. The U.S. economic data pace picks up rapidly on Tuesday and it’s a big data week.

Some Important data releases are due this week- 

● U.S. personal consumption expenditures price index report due on Thursday

● The August US nonfarm payrolls (NFP) report due out on Friday is likely to provide valuable information on the outlook and guide the Federal Open Market Committee's (FOMC’s) decision-making process, so traders should follow the release closely.

● The strength or weakness of the NFP survey will be pivotal for the US dollar and gold prices, significantly shaping their near-term trajectory by influencing the Fed’s tightening roadmap.

To sum up, the Gold Price has the majority of catalysts needed for the further upside but $1,940 and broad US Dollar weakness, as well as the downbeat yields, will decide the further advances of the precious metals and the dollar

The U.S. economy is set to enter a period of very low growth combined with persistent inflation, and this means precious metals like gold and silver are likely to see significant prices increases.

While we will not rule out the potential for additional upside action in gold and silver prices today, bullish classic fundamental supply and demand information is not overtly clear for the bull camp. Nonetheless, the outlook for China has improved minimally and the charts in gold and silver prices have improved thereby allowing for some follow-through gains. We suggest longs use stops on gold at $1937, with stops in September silver at $24.07.