Gold is higher on Wednesday, rising above the level of $ 1,340. British Prime Minister David Cameron, retired early in the day and was replaced by Theresa May. While this has brought some much-needed political stability in Britain the leadership change occurred much faster than expected, meaning that the tough negotiations and disorderly on divorce Brexit begin sooner than expected. The Home Secretary, Theresa May, has assumed the position of prime minister. May was a strong supporter of the field remain, but now entrusted to preside over the departure of Britain from the European Union. Mayo has declared that the government has every intention to honor the referendum, saying that "Brexit means Brexit". The British electorate may have voted "Leave", but the vote can be the easiest part of the process. A member of the EU has never invoked the exit clause before, and there is no timetable for when the output or what kind of trade agreement will occur will define the new economic relationship between the EU and Britain. In turn, the Bank of England is about to cut interest rates for the first time since 2009, and such a measure could have a strong impact on the markets. It is expected that the Bank of England cut rates in order to tackle an economic crisis in Britain because Brexit. At the same time, the head of the Bank of England, Mark Carney, who appeared before a parliamentary committee on Tuesday, acknowledged that Brexit could lead to the collapse of the economy and the measures that the central bank was taking in response not provide a "magic bullet" against Brexit.
Already in December last year when the Federal Reserve raised interest rates for the first time in nine years, there were high hopes that the Federal Reserve could continue with a series of hikes in 2016. Fast forward to July, and the Fed it is yet to make a move this year, as the US economy has not matched its impressive growth rates in 2015 of the last week Fed minutes reinforced the perception that the Fed is unlikely to tighten policy in the short term, as the Fed remains cautious attempt on the strength of the US economy. Although some members of the Fed have said that rates could rise up twice in 2016, it is clear that markets are not buying. 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. even so, market sentiment can change very quickly, so if the number of jobs and US inflation improved in the second half of the year, the probability of a rate hike this year it will increase.
/ USD XAU Basics
On Wednesday (July 13)
8:30 US prices import. 0.6% estimate. Current 0.2%
10:30 oil inventories US. -2.3M Estimate. Real -2.5M
13:01 US auction of 30-year bonds
14:00 US Beige Book
14:00 balance the federal budget in the United States. estimate 24.2B
Thursday (July 14)
8:30 PPI. Estimate 0.3%
8:30 jobless claims US. 263K estimate
* Key Announcements are highlighted in bold
* All times are EDT release
XAU / USD for Wednesday, July 13, 2016
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