Gold prices remain strong, as a safe haven has become a magnet for nervous investors. The metal hit a high of $ 1.375 on Tuesday, marking its highest level since March 2014. Gold has been one of the big winners of the Brexit consultation, as financial markets are betting on a victory remain and were completely surprised by the vote Brexit leave the European Union. Gold has taken full advantage of the chaos, posting strong gains of 8.8 percent in June and continued upward movement in July. Instability and uncertainty surrounding Brexit means that gold prices could continue to rise, and highly respected UBS said that gold has begun an uptrend and reach the level of $ 1400 short term.
The Federal Reserve released the minutes of its June policy meeting, Wednesday. Politicians expressed concerns about a slowdown and hiring and health of the US economy, and the underlying tone was one of prudence and caution. The June meeting took place just a week before Britain voted to leave the EU, which has caused turmoil in the markets and bond yields to historic lows is sent. The minutes show that Fed members projects two rate hikes before year-end, but the prognosis is likely out of date following the shockwaves of Brexit. Given the current economic climate, markets are pessimistic about rates movements before 2017. Investors have discounted any possibility of a rate hike at the next Fed meeting on July 26-27 and only a probability of a hike eight percent in 2016. However, if the number of jobs and US inflation improved in the second half of the year, the probability of a rate hike will certainly increase.
Fed Chairman Janet Yellen and his colleagues continue to sound cautious about the US economy and financial instability caused by Brexit could delay any rate hikes until 2017. The US economy is in good shape, but the Fed has not raised rates since last December and is unlikely to seriously consider rate hikes unless the employment and inflation figures point upwards. Although Brexit Yellen said recently that would have an impact in the US, the president of the Federal Reserve Bank of San Francisco John Williams seemed to agree with that assessment. On Tuesday, Williams said the US markets had reacted to Brexit as expected, and the impact on the US economy would be much smaller than the euro crisis 2011-2012. Brexit is having an impact on the monetary policy stance of the Fed? We can get an answer to that question when the Fed meets again for a July policy meeting. 26 to 27
/ USD XAU Basics
Thursday (July 7)
7:30 The US courts Challenger job. Real -14.1%
8:15 US ADP non-farm employment change. 158K estimate. Real 172K
8:30 jobless claims US. 269K estimate. 254K Real
10:30 US Natural Gas Storage. Estimation 42B. Real 39B
11:00 oil inventories US. -2.1M Estimate. Real -2.2M
Upcoming key events
Friday (July 8)
8:30 US hourly wages. Estimate 0.2%
8:30 US Nonfarm Employment Change. 174K estimate
8:30 Unemployment Rate US. Estimate 4.8%
* Key Announcements are highlighted in bold
* All times are EDT release
XAU / USD for Thursday July 7, 2016
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