Data Pull Gold in 2 Directions Posted by Brian Ford on July 30, 2014
It has been a busy two trading days for the gold market, as a slew of economic data and geo-political wranglings have struggled to give an advantage to both the bears and the bulls. As of 1pm CST the COMEX gold spot price is $1,305.20, up $2.20 for the session. In the last 30 days the gold spot price has fallen $16.30 (1.24%) and gold is down $28.40 (2.14%) since July 29 of last year. Among the items motivating the gold investing market today. Information with a “+” sign is indicative of something that could be bullish for gold, while “-” signs indicate news that has historically been bearish for the yellow metal:
-The Federal Open Market Committee (FOMC) is set to meet for a discussion on U.S. monetary policy, interest rates, and quantitative easing. “The prevailing chatter is that the Fed is going to pull back another $10 billion a month in QE,” said Archer Financial Services senior account executive Jim Comiskey.
-The U.S. Labor Department reported that the number of workers in the U.S. services industry is at its highest level since 2010.
+Pending U.S. home sales fell last month, for the first time in February, according to two separate studies.
-Morgan Stanley investment bank says its analysts expect “a sustained, re-acceleration in global growth, characterised by less negative surprises than we have seen over the past year.”
+Overall bearish gold positions are at their lowest level since March. The current overall net bullish positions for gold stand at 563 tonnes of gold bullion – a 70% increase over the average from the last 18 months.
-The July consumer confidence index, released today, revealed a 90.9 reading. Compared to June’s reading of 86.4, it appears as though consumers could be warming up to current economic conditions.
+CIBC senior economist Andrew Grantham said that the higher consumer confidence report does not automatically result in higher spending. “[That] detail of today’s report doesn’t suggest households will be opening their wallets any wider in the coming months.”
+Gold bullion manufacturer Credit Suisse has noted that tighter fiscal policy, tight U.S. mortgage market credit, and low expectations for wage growth could all benefit gold bullion prices throughout the rest of 2014.
-Analysts have estimated that Wednesday’s Q2 growth report, as well as Friday’s jobs report, could indicate that the U.S. economy is improving.
+Federal Reserve Chair Janet Yellen recently said that interest rates could rise soon. Rising interest rates helped gold’s value increase over 1000% from 1960 to 1980.
+Ongoing escalation between Russia and Ukraine has caused some investors to buy gold for safety and as a hedge against unstable stock markets. The geopolitical tension between Gaza and Israel has also boosted gold prices.
-U.S. consumers’ expectations for inflation during the next year fell from 5.5% in June to 5.4% in July.
+Economists working with Nomura said they do not expect any substantial changes to U.S. monetary policy anytime soon. Many gold market analysts have said for years that U.S. monetary policy has been one of gold’s biggest drivers since 2001.
Clearly, there are data supporting both sides. To discover how to locate and interpret economic data on your own to maximize your growth in the gold market, call us today at 800-300-0715 and take advantage of our award-winning gold investment guides shown below.