Strong earnings numbers from Home Depot, Lowe's, and Target are positive indicators for the consumer and for the economy. The recession talk from last week has died down, and both of these factors are negative for gold, at least in the near term.
In the absence of scheduled data this week, the trade has been looking to the release of the minutes from the July FOMC policy meeting this afternoon, the Fed's Jackson Hole symposium on Thursday, and the G7 meeting August 24-26 for direction. Expectations to this point seemed to be leaning dovish, which may be difficult for policy makers to live up to.
The Trump administration is floating the idea of a payroll tax cut. That and President Trump's expressed desires for a "big" rate cut could be supportive to gold, but this contradicts the strong economy talk from the administration over the weekend, as well as the strong earnings data.
Expectations that central banks will be pursuing easy monetary policy are a key part of the argument for higher gold prices, but it may be hard to satisfy the bulls' desire for that type of news this week.
There have been several stories on the wires about poor gold demand from India this holiday season, due to poor crops, which leave farmers with less money to spend, as well as changing tastes.
Investment interest in gold continues to be strong, with ETFs increasing their gold holdings for the fifth straight session on Tuesday.
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Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Financial Services LLC, unless otherwise expressly noted.
