Gold Continues Winning Streak For The Second Week In A Role
Gold is maintaining its $1,400 level due to expectations for the U.S rate cut before August. This makes it the second straight week of gains for the yellow precious metal.
Spot gold recorded a daily trade of $1,428.85 per ounce and was down by 0.1% while Gold futures traded on the Comex division of the New York Mercantile Exchange lost $1.40 of its value to trade at $1,426.70.
Gold Futures Rose Despite “Overvalued” Dollar
Bullion, as well as gold futures, rose by 0.6% despite the weak U.S housing data. This also comes at a time when the IMF referred to the Dollar as “overvalued.”
President Donald Trump took to Twitter to push for lower interest rates on Friday. Trump also accused the Fed of using a faulty thought process as the markets contemplate the chance of a 50-basis-point cut at the policy meetings of July 30-31.
Jerome Powell, Fed chairman has shrugged off the president’s attacks citing the independence of the central bank as well as the lack of necessity to respond to political pressure. Analysts believe there is a 60% chance that rates would be cut by 50 basis points after the policy meeting in September. This would place the key fed funds rate at 1.75% to 2%.
Central banks all over the world have been quite dovish when it comes to monetary policy that benefits non-yielding gold. The outlook for reduced interest rates has spread across the income market and this resulted in $13 trillion worth of bonds with negative yields. This makes gold more appealing to investors.