On Tuesday the head of the Federal Reserve, Janet Yellen, stated that there is ‘considerable uncertainty' in US growth outlook. She also brought to attention the fact that some data suggests the US economy keeps growing, but some events, like the upcoming ‘Brexit' referendum, bring the mentioned uncertainty. According to Yellen, the US economy is expected to reach full employment and its 2% inflation target within the next few years. Growing household incomes, improvements in the housing industry, along with low mortgage rates, should trigger improvements in the labour market to appear and, therefore, in the economy overall. Furthermore, Janet Yellen touched the question of the interest rates, explaining that the FOMC has been hesitant to do so due to periodicallydisappointing readings in the labour market, as well as inflation remaining below its key target. Also, she assured that some weakness in the labour market should not be considered as a game changer in the Fed's monetary policy decision, as there were strong readings present too. Finally, she warned about foreign risks, such as the slowdown in global economy, lower inflation and interest rates may cause investor risk appetite to arise. Amid these issues and concerns, the US monetary policy is not
According to the minutes released by RBA from its June meeting, the cash rate was maintained at record low 1.75 %, while measure of both short-term and long-term inflation remain below average. Following minutes, gave no indication that it would ease again in the nearest future. Meanwhile, low inflation and concerns about deflation forced RBA to announce an interest rate cut in May, in line with the release of the federal budget. Consumer prices, in turn, were below trend and are expected not to change, giving an additional support to the bank to keep the rate unchanged at 1.75% after May's 25-basis point cut. In the meantime, during the first quarter, the Australian economy had expanded 3.1%, showing the fastest growth in three and a half years. Low interest rates as well as weak Australian dollar were reinforcing the economy, thus pushing the unemployment rate down to 5.75% from 6.25% during the current year to the March quarter. Moreover, an overall advance in exports due to the higher resource production, also provided an additional support to the economy. Recent economic data proves that Australia is experiencing overall growth, despite a huge decline in business investment.
Upcoming fundamentals: FED's Janet Yellen testifies and crude oil inventories
Gold declines to 1,267 on Wednesday
Daily chart: The bullion fell sharply on Tuesday, as its worth declined from 1,289.46 at the start of trading to 1,268 at the end of Tuesday's trading session. With it, the metal moved below the monthly R1 at 1,278.62 and the weekly S1 at 1,274.76. At the moment, the yellow metal is trading at 1,267.60 against the US Dollar, and, if it continues its downfall, gold will likely move to the second weekly support at 1,251.97. However, aggregate technical indicators strongly forecast a surge for the commodity today, as not even one indicator predicts a downfall.SWFX traders continue to decrease bearish sentiment on Wednesday
Spreads (avg,pip) / Trading volume / Volatility
Market participants foresee the price of gold at 1,275 by the end of August
Traders who were asked regarding their longer-term views on gold between May 22 and June 22 expect, on average, to see the metal around 1,275 by the end of August. Generally, 60% (-12) of participants believe the price will be generally above 1,250 in ninety days. Alongside, 30% (-2%) of those surveyed reckon the price will trade in the range between 1,100 and 1,250 over the next three months