Gold prices are at $2,435 an ounce this Monday morning, increasing from $2,385 an ounce last Monday.
The Consumer Price Index last Thursday was favorable for investors anticipating an interest rate cut at the Federal Reserve's next meeting in September.
The most significant potential market-moving news of the month was former President Donald Trump's assassination attempt on Saturday, July 13th. This morning, on July 15th, some markets are reacting to the increased chances of a Trump victory in November.
A Trump win would likely give Republicans down-ballot wins to control the House and the Senate, which has only happened three times in history. Touted as a 'Trump trade' this morning on CNBC, Squawk Box, this scenario could lead to a more business-friendly environment, potentially boosting the stock market and reducing the appeal of safe-haven assets like gold. For the first time since January, treasury yields are aligned normally, with the 30-Year Treasury Bill yielding higher than the 2-Year Treasury Bill.
Potential market-moving events for this week include:
Monday: Fed Chairman Powell Speaks
Tuesday: U.S. Retail Sales, Home Builder Confidence Index
Wednesday: Housing Starts, Building Permits
Wednesday: Industrial Production
Thursday: Initial Jobless Claim
Monday - Friday: Fed Reserve Speeches: (5) Fed Presidents, (3) Fed Governors, (1) Fed Chairman
A new headline in a Wall Street Journal report this Monday, July 15th, reads, "Interest Rate Cuts Will Soon Be Warranted." The quote came from Chicago Federal Reserve President Austan Goolsbee, a respected figure in the financial industry known for his insightful analysis and accurate predictions.
With over nine Federal Reserve speakers this week, investors will be looking for any indication of the Fed's decision to reduce interest rates during their upcoming September 18th meeting. Jerome Powell delivered two days of testimony on Capitol Hill last week, saying that the Fed viewed the risks between rising inflation and a slowing economy as more balanced now. He also said the central bank did not need to wait for inflation to reach its 2% target before cutting rates.
Another significant consideration this week is the potential impact of a Trump victory on the price of gold. In short, the expected policy mix in a second Trump administration includes tariffs and an extension of the 2017 tax cuts. These actions could increase the risk of reviving inflation and hurt bond prices as investors demand higher yields to compensate. This could lead to an increase in gold prices as investors shift their focus to higher-yielding assets, which is good news for investors with gold in their portfolios.
It's important to note that lower interest rates and bond prices have historically been inversely related to gold prices. This is valuable information for investors, instilling a sense of confidence and understanding in their investment decisions.
We would also like to extend a special invitation to you to join our next live webinar at the U.S. Gold Bureau. This is a great opportunity to delve deeper into topics relevant to the industry and be part of the ongoing discussion. Register here: https://secure.usgoldbureau.com/events/
Posting in:
byUnited States Gold Bureau