On the second day of the Federal Reserve Governor's testimony on Wednesday, Janet Yellen stated that a number of risks for the US economy is still present, thus, the Fed is taking a cautious approach to the monetary policy and the interest rate hike this year in general. One of the mentioned risks was the remaining weakness in the labour market, with the bullish trend continuing to slow down, justifying the Fed's decision to postpone June's interest rate hike. Among other reasons mentioned, Janet Yellen said that business investment was low and the energy sector suffered from low oil prices for years. Nevertheless, the long-term expectations for the US economy remain advantageous, despite some arisen factors providing difficulties. Furthermore, the possible interest rate hike in July is now expected to be delayed by most economists, with the next probability shifting to September.
In the meantime, the US Existing Home Sales figures fell in line with expectations, having risen to the highest in nine years. Low mortgage rates caused the desired effect, with Home Sales up 1.8% to 5.53 million (annualised) in May, as reported by the national Association of Realtors. Apart from the mortgage rates, rising employment and stock prices improved consumer sentiment, but growing home prices could still bring the figures down.
Gold - destination of funds in case of 'Brexit'
Gold steps further away from 2015 high
Gold keeps moving away from the 2015 high, being unable to surpass this resistance neither in May nor this month. Nevertheless, we may expect more attempts of the bulls to push the price over the 1,307 dollar barrier, as indicators are pointing north in all three relevant time frames. The immediate resistance is at 1,280 dollar, and if it is broken, the rate will be in a good position to re-visit last year's maximum. Meanwhile, the extension of the decline is to meet a combination of the 55-day SMA and weekly S2 at 1,257/53.Sentiment among the brokers is mixed
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