Gold: Stable, Trader Bias Shows Moving To Higher Ground
Frankfurt (Feb 27) Gold has shown limited movement on Friday, as the spot price stands at $1205.02 in the European session. On the release front, the US will issue its second estimate of GDP for Q4, with a forecast of 2.1%. This is lower than the initial estimate of 2.6% in January. We’ll also get a look at revised UoM Consumer Sentiment and Pending Home Sales.
Thursday’s US inflation and job numbers were not impressive. US inflation indicators continue to struggle. CPI posted a third straight decline, coming in at -0.7%. This was very close to the forecast of -0.6%. Core CPI improved to 0.2%, edging above the estimate of 0.1%. On the employment front, there was disappointing news, as Unemployment Claims jumped to a 6-week high, coming in at 313 thousand. This was much higher than the estimate of 288 thousand.
Greece and its international creditors have agreed to extend the bailout agreement after Greece’s list of economic reforms was accepted by the country’s creditors on Tuesday. Under this agreement, the Greek government has promised to continue with privatization plans and to meet budget targets. Still, the extension is a stop-gap measure and with sharp differences remaining between Greece and its creditors, the bailout crisis is far from over. If Greece and Germany again lock horns and raise doubts about whether Greece will remain in the eurozone, we could see the euro lose ground.
Janet Yellen testified before Congressional committees on Tuesday and Wednesday, saying that the Fed was “unlikely” to raise interest rates in the next few months, given current economic conditions. Her remarks seemed aimed at quelling rising speculation about a rate hike sometime in mid-2015, which has helped boost the US dollar’s performance against its major rivals.
Yellen noted that the continuing economic growth should lead to unemployment continuing to fall, but wages and inflation need to move higher before the Fed raises interest rates.
Source: Investing.com
