Gold inter-markets: might continue with near-term range-bound price action ahead of Jackson Hole
|Despite of a recent slump in the US Dollar, which is seen supportive for dollar-denominated commodities, Gold has failed to gain traction and remained confined in a broader trading range. Currently trading around $1340, below 20-day SMA, the metal is struggling for direction amid mixed US Dollar performance against its major peers.
Uncertainty surrounding prospects of an eventual Fed rate-hike in 2016 has been weighing on the greenback. The commodity, however, has failed to benefit from weaker greenback as continuous slide in the Volatility Index (VIX), accompanied with the ongoing bullish momentum in the broader US equity index (S&P 500), has not been supportive for the safe-haven appeal of the precious metal.
Meanwhile, a tepid recovery in the USD/JPY major, albeit of recent hawkish rhetoric from the Fed officials and dovish comments from BOJ Governor Haruhiko Kuroda, has been contradicting to the prevalent risk-on sentiment. Moreover, the longer-term (30-years) US Treasury bond yield remained suppressed and is suggesting that market remains skeptical over Fed rate-hike action in the near-future.
Moving ahead, the Federal Reserve Chairwoman Janet Yellen's speech at Jackson Hole Symposium on Friday would be looked upon for clear signals regarding the central bank's monetary policy outlook and its plan to further raise interest-rates in 2016. Until then Gold prices might continue to oscillate within a broader trading range.
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