Gold has headed lower in the Monday session. In North American trade, the spot price for one ounce of gold is $1221.35, down 0.42% on the day. It’s a quiet start to the week, with no U.S releases on the schedule. On Tuesday, the U.S releases Richmond Manufacturing Index.
Relations between the U.S and China remain strained, as the trade war continues to simmer between the world’s two largest economies. On Thursday, the U.S Treasury Department released its semi-annual report on foreign exchange rates, and there was some relief in the markets as the report did not name China as a currency manipulator. Still, the report said that the U.S was “deeply disappointed’ with that China refuses to disclose the extent of its foreign currency intervention. The Chinese yuan has slipped some 9 percent since April, and U.S officials are concerned that China has deliberately weakened the currency in order to counter U.S tariffs on Chinese goods, and will continue to monitor China’s currency practices. (if you want to earning in the currency market use our forex robot)
Gold prices were up last week, despite a hawkish tone from the Federal Reserve minutes on Thursday. The minutes indicated that a majority of members want to continue raising interest rates until the U.S economy shows signs of slowing down. However, the duration of a tighter policy remains unclear, as the minutes noted that “there is considerable uncertainty surrounding all estimates of the neutral federal funds rate.” This would likely be around the 3 percent level, which will not be reached until the second half of 2019, as the Fed has indicated it will raise rates three times next year. At the September meeting, the Fed removed the phrase “the stance of monetary policy remains accommodative”, which was considered outdated, given the policy of steady rate hikes. As rates approach the “neutral rate”, we could see further changes in language at upcoming policy meetings.
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