Gold price waiting on Jackson Hole monetary conference as dollar rises

Jackson Hole sign

Gold has remained steady ahead of the outcomes of the Jackson Hole monetary conference. Gold this morning was at $1,286.12, with gold for delivery in December at $1,292.40. The static status of the price is seen as symptomatic of the market’s wait-and-see approach to the meeting of the world’s monetary policy makers in Wyoming.

Nothing left-field is predicted but investors see a wind down of quantitative easing and deficits as likely. “The market is pricing in the Federal Reserve’s actions at the Jackson Hole meeting and people are expecting some kind of tightening going on in that space,” Richard Xu, a fund manager at China’s biggest gold exchange-traded fund, HuaAn Gold told Reuters. “That’s why gold is going to be under some kind of pressure.”

Further pressure may also come from the greenback. The dollar has continued to recover following president Trump’s claims he would be willing to close the Federal government in order to build a controversial wall along the US-Mexican border. Carsten Menke, Commodities research analyst at Julius Baer emphasised the dollar’s mispricing: “While there is a good chance of no major announcements in terms of central bank policy, we still see the dollar undervalued at the current point in time. The solid growth backdrop in the United States and the outlook for higher interest rates support our expectation of a rebounding dollar which should cause some headwinds to gold.”

Menke went on to say he saw gold heading back to $1,200: “Inflows into physically backed gold products have picked up slightly, but not to the extent one might expect amid ongoing turmoil in the Trump administration and lasting tensions with North Korea. That said, we see neither of the two as a lasting driver of gold prices unless consequences for the economy or financial markets arise.”

In mining news the Brasilian government has removed the protected status of a huge swathe of the Amazon rainforest.

An area the size of Denmark, 46,000 sq km (17,800 sq miles), across the northern states of Amapa and Para has had its status as a national reserve removed, meaning up to 30% of the region could be subject to mineral extraction.

While the mining ministry believe the move will provide an economic boom, conservationists are clear the environmental cost to the Amazon rainforest, its indigenous peoples and wildlife is too high. Mining in the area would lead to “demographic explosion, deforestation, the destruction of water resources, the loss of biodiversity and the creation of land conflict,” said Maurício Voivodic, head of the conservation body WWF in Brazil.

Photo credit: Dhtrible at English Wikipedia

Link to this article: : http://www.goldmadesimplenews.com/gold/gold-price-waiting-on-jackson-hole-monetary-conference-as-dollar-rises-13366/

Posted by on Aug 24 2017. Filed under Gold News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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