Geopolitics, Federal Reserve On Tap For Gold Next Week
New York (Aug 16) Geopolitics and news from the Federal Reserve will dominate the gold market next week, but market watchers said volumes may continue to be light going into the last two weeks of August as Northern Hemisphere traders try to get in last-minute summer vacations.
December gold futures fell Friday, settling at $1,306.20 an ounce on the Comex division of the New York Mercantile Exchange, down 0.37% on the week. September silver fell Friday, settling at $19.94 an ounce, down 2.08% on the week.
In the Kitco News Gold Survey, participants were split. Eight participants see higher prices, eight see lower prices and four see prices trading sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.
After holding in a rather tight trading range this week, gold prices fell Friday following as-expected U.S. economic data; wholesale U.S. inflation prices rose only 0.1% in July and the New York manufacturing data showed expansion. Gold prices set the low for the week on the reports, but came off session lows after news that the Ukrainian military destroyed part of the Russian armed convoy that crossed into Ukraine. That allowed gold prices to rise back over $1,300, but values remained soft.
Although gold prices ended the week weaker, the metal remains in a wider trading range between $1,280 and $1,320, slightly bigger than the $1,300 to $1,320 range it held this week. And several market watchers said gold could stay in that range, but test the lower side of it next week.
That will be dependent on geopolitical news, however. A few market observers said a cooling down in some global hotspots, such as the Israel-Hamas conflict subsiding from the news headlines and Iraq’s situation becoming less tense in recent days.
One North American bullion dealer said he expects gold will test the lower end of the range because of this.
“If you look at the situations that had been heating up, those are starting to be managed. Gaza has faded, the Iraq situation has stalled out, although that cannot be maintained. The hot button is Ukraine. The other side of the coin is U.S. economic data. We had two surprise results this week, retail sales and jobless claims surprising, but data out today was good, just as expected,” he said.
Source: KitcoNews
