Fed’s Clarida Casts a Shadow for Short-Term Gold Buyers
Concerns over Chinese regulatory worries faded this week, but expectations of a deeper correction in stocks are still hanging heavy over market participants as we head into the summer. Fed’s Vice Chair Clarida influenced markets this week as he took a hawkish stance in his first post-FOMC comments. So, if we see a more hawkish perspective emerge from Fed speakers moving towards the Jackson Hole Symposium, then expect gold to buck its seasonal uptrend for August and register losses.
Other key events from the past week
- * USD: Fed Vice Chair, Aug 03: Fed’s Clarida raised concerns over rising inflation and took a more hawkish position in his first post-FOMC remarks this week. Clarida is willing to raise rates as soon as 2022 if the right conditions are met.
- * AUD: RBA meeting, Aug 02: The RBA took a more hawkish response than markets were expecting by focusing on the hopes that the nation will be able to weather the expected GDP drop in Q3. However, a strong New Zealand jobs print kept the AUDNZD sell bias alive.
- * GBP: BoE rate decision, Aug 05: The Bank of England failed yet again to deliver a hawkish message. The new MPC member set now has a clear dovish leaning and the asset purchase vote split was 7-1 rather than the expected 6-2.
Key events for the coming week
- * USD: Peak inflation, Aug 12: If the market senses that peak inflation has passed, then the USD should weaken out of Wednesday’s CPI print. Remember, the core reading is the one the Fed is looking at carefully.
- * Seasonal trades: Find a trade, August 09: August tends to be a weak month for the FTSE 100 with April being its strongest. However, will the 7500 region still be reached this year? Check out the UK FTSE 100 pattern for August here.
- * Oil: OPEC+ meetings, Aug 13: The key question for OPEC+ is whether they will maintain their plan to curb production cuts next year. If they speed up the timeframe for those cuts expect that to weigh on oil prices next week.
Giles Coghlan
