The price of gold virtually motionless as the market awaits some news from Federal Reserve chair Janet Yellen’s speech Friday at Jackson Hole.
For those who are not familiar Jackson Hole, it is typically a mountain resort for skiers and mountain climbers. Every summer it turns into the site of an exclusive conference of central bankers who are responsible for global monetary policy.
The title of this year’s conference is: Designing Resilient Monetary Frameworks for the Future. I’ve asked a few prominent Wall Street traders to shed some light on what that might mean and most said they have no clue.
I have heard the same response from many traders when asked if the FED is in touch with reality and their response was the same “it seems they no clue on what to do regarding a rate change.”
So it’s no surprise that the price of gold remains motionless as we wait for the Fed Chair’s comments.
CME’s FEDWATCH Tool gives just a 24 pct. chance that a rate hike will happen at the September Fed meeting.
November’s meeting is showing a 29 pct. chance and December a 52 percent chance.
No wonder the Gold ETF market has been flat for the past week or two with no significant moves either way
with inflows or redemptions.
Many news guests on CNBC, FOX and Bloomberg have also expressed their frustrations with Fed policy.
If you remember I reported on a Flash Gage last week that it seems after reviewing the minutes from the last Fed meeting, voting participants are split down the middle trying to decide if a rate hike is appropriate.
It seems that the only news that moves the price of gold these days are stories of a possible rate hike. Whatever happened to supply and demand issues and inflation worries?
As I’m in the process of completing my comment this morning, I see the price of gold break thru the important level of support at $1,332 in the December contract down $ 14 .00 quickly from when I started this report so I’m scrambling to find the news that created this sell off.
Looking at times and sales it looks like at 8:40 Eastern time, someone sold 10,000 contracts of December gold causing the market to drop $ 14.00. Looking at all the news wires available to me I find NO news that would justify that sell off.
If any significant news is released I will be right back with a Flash Gage report.
Author Name: Walter Pehowich
Walter Pehowich is the executive vice president of precious metals investment services for Dillon Gage with over 38 years of experience in precious metals investment services. His career began in 1977 at Bache (which evolved to Prudential-Bache Securities and then Jefferies Investment Bank). While at Jefferies, he served as senior vice president with oversight of investment grade precious metal products. Pehowich holds a National Futures Association (NFA) Series 3 license, authorizing him to advise and sell alternative investments in commodities and futures markets.