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Earlier damage was later covered by the Fed Chair’s speech rejuvenated the market due to uncertainty on the stance of the Fed.
For August delivery, Front Month Comex Gold shot $ 37.50 (or 1.12%) to $ 3,374.40 per troy ounces today. Gold for the week received $ 38.40 (or 1.15%) per troy ounce.
Front Month Comex Silver for August delivery today increased from 97.60 cents (or 2.57%) to $ 39.003 per troy. Silver obtained $ 1.1090 (or 2.93%) per troy ounces for the week.
Earlier in the session, expectations from traders to cut the fed rate in September were silenced as the minutes of the July meeting released on Wednesday revealed that two members of the board were isolated in their calls for monetary ease.
Later in the Jackson Hole seminar, Powell indicated on a possible rate cut in offing.
Pointing to the growing risk for the job market (with a disappointing July labor report -a strong down amendment to hiring the number in the last two months) and increased the risk of inflation, Powell confirmed that it requires a balanced response from the central bank. He also suggested that unemployment remains low, risks for the labor market are increasing and the policy remains “restrictive”, and therefore adjustment can be “warrant.”
The yield of 4.311% to 10 years Treasury was 4.271% before the speech. The yield of two years was 3.797%, below 3.783%.
While the treasury yields decreased, the markets rapidly reacted to Powell’s speech with the fedwatch tool of the CME group that investors are betting on 91% of the 25 base point rate cuts.
Currently, the benchmark borrowing rate is in the range of 4.25% to 4.5%.
When the interest rates are longer for the longer time, it adds pressure on non-shee gold as they increase the purchase and opportunity cost.
Note, US President Donald Trump clearly reduces his desire to promote low-b-onion regime and public pressure on the fed.
On the geopolitical front, after leading efforts to end the Russia-Ukraine war, Trump, stating that he intends to facilitate a meeting between Russia and Ukraine presidents, said that Trump took a disintegrated stand. He said that he can later involve himself when the need arises.
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