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The Federal Reserve’s June policy meeting resulted in an accelerated timeline of withdrawal of monetary stimulus efforts, seemingly dragging forward rate hike expectations and implicitly the taper line.
Even though global bond yields at the long end of the curve have started to pull back, it remains the case that inflation expectations are dropping faster, which has created a churn higher in real yields.
The June Fed meeting helped enshrine the narrative that the US economy is regaining its long-term economic potential – and that recent hot inflation readings are destined too cool off.
By lacking meaningful ‘high’ rated event risk on the DailyFX Economic Calendar, gold prices may not be afforded a catalyst to shift the sea change in narrative .
– On Thursday, gold in EUR-terms could experience some volatility around the Bank of England rate decision.
– On Friday, gold in EUR-terms is in the spotlight again with the July German consumer confidence report.
According to the CFTC’s COT data, for the week ended June 15, speculators decreased their net-long gold futures positions to 209.4K contracts, down from the 213.7K net-long contracts held in the week prior.
Gold: Retail trader data shows 85.74% of traders are net-long with the ratio of traders long to short at 6.01 to 1.
Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors.