Gold Close to 2-Month Lows as Markets Eye Jackson Hole
New York (Aug 22) Gold remains under pressure on Friday, as the metal hovers close to two-month lows. The spot price stands at $1277.68 per ounce in the European session. There are no economic releases out of the US today. The markets will be closely monitoring the symposium in Jackson Hole, Wyoming, with Federal Reserve Chair Janet Jackson and ECB President Mario Draghi scheduled to speak on Friday.
Financial leaders and central bankers from around the world have gathered in picturesque Jackson Hole, Wyoming. This is Janet Yellen's first appearance as Fed chair at the conference, and she will deliver a keynote speech on Friday. Mario Draghi is scheduled to speak about labor market dynamics, but the markets will be hoping to hear some ideas about how the ECB plans to tackle the lack of inflation and growth in the Eurozone. There is speculation that Jackson Hole could be a currency event, which would be a marked departure from the conference's usual focus on the US labor market and monetary policy. If this is the case, we could see a sharp reaction from the currency markets. Traders should therefore be prepared for some movement from EUR/USD during the day.
US releases wrapped up the week on a high note. Unemployment Claims improved to 298 thousand, lower than the estimate of 302 thousand. The key indicator has now beaten the estimate in six of the past seven readings. Thursday's other key event, the Philly Fed Manufacturing Index, shot higher in July, rising to 28.0 points. The markets had expected the indicator to slip to 19.7 points. There was more good news on the housing front, as Existing Home Sales improved to 5.15 million, well above the estimate of 5.01 million. This marked the highest level we've since September 2013. What is particularly encouraging is that the data stems from a wide range of sectors, which points to balanced economic growth.
In a highly anticipated event, the Federal Reserve released its policy meeting minutes on Wednesday. The minutes were hawkish in tone, with the Fed saying that an interest rate hike could come sooner rather than later if employment numbers continue to improve. The Fed said that the economy continues to improve, but the QE program, which is scheduled to wind up in October, will not be accelerated. Once the asset purchase scheme is terminated, the guessing game as to a rate hike will only intensify. Will Janet Yellen provide some clues when she speaks in Jackson Hole?
Source: FXstreet
