Gold Price Lower Ahead of FOMC, Holmes Expects $1,000 - $1,350 Range
New York (Aug 18) Gold prices were slightly lower ahead of this week’s anticipated release of the minutes from the July Federal Open Market Committee meeting. Frank Holmes, chief executive officer at US Global Investors said he expects gold to be stuck in the $1,000 to $1,350 range for the next six months. Spot gold was last down $1.00 at $1,116.40 an ounce. As to what will come out of this week’s Fed minutes, Holmes expects more of the same, noting every word will be heavily analyzed. ‘Traders are now pricing in about a 40 percent chance the Fed will raise interest rates at its September meeting,’ Holmes said. “That’s down from 54 percent on August 7,’ he added. For now, Holmes said the gold market is taking cues from the Chinese stock market which sold off sharply again Tuesday, with the Shanghai composite index down more than 6% on the day. ‘The love trade out coming out of China is being impacted by the Shanghai stock market, there is no doubt,’ said. ‘However, the Chinese government is now reporting their consumption of gold on a monthly basis, and I think this is very significant,’ he told Kitco News on Tuesday.
China has been more vocal with its gold reserves, last Friday it said its holdings rose by nearly 19 tonnes in July from June disclosing its holdings for the second time in two months. Holmes said it is all part of the People’s Bank of China’a march to become a currency that is sponsored and supported by the International Monetary Fund in their special drawing rights.