Bullion trend analysis May 26

Post Time:2016-05-27 Resource:www.hj9999.com Views:

26-May (USAGOLD) — Gold was unable to sustain intraday upticks, resulting in continued pressure on the downside, amid ongoing speculation about a Fed rate hike. Recent Fedspeak continues to foster the notion that June is in play, which first emerged when the Fed minutes from the April meeting came out last week.
While the dollar has come off the recent highs, investors in the yellow metal seem inclined to scale back long exposure ahead of tomorrow’s second look at Q1 GDP. GDP is for the first three-months of the year is expected to be revised higher to +0.9% from the preliminary read of +0.5%. That’s still pretty soft, but expectations for Q2 GDP have been edging higher as well.
Brean Capital’s Peter Tchir says the Fed has been “horrible in terms of tying everyone to this small tiny number (25 bps),” and suddenly have investors who were pretty sure a week ago that June and July were not in play, wondering what they might have missed. “They’ve caused uncertainty,” warned Tchir.
Despite the Fed’s professed goal of providing clear guidance, they do indeed seem to be the primary purveyors of policy uncertainty. Are they just terribly at this guidance thing, or is fostering uncertainty their real goal?
The GDP revision and the May jobs report will hopefully provide some clarity over the course of the next week. But even if the Fed does bumps rates by another 25 bps, it by no means signals the end of the bull market in gold. In fact, the first rate hike back in December marked the beginning of that trend.

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