2016-10-24 15:53:39

Prices of the precious metals are declining in the market. Investors are waiting for the interest rate hike in the USA at the end of this year. According to the CFTC, last week, the number of long position on gold has dropped to the lowest level since June, while the number of short positions has increased.

According to CME Groups, probability of the rate hike in the USA last week was 74%; today it is about 65%.

Confirmation by the US Fed officials of the interest rate hike also triggers the rise in the long positions on the USD.

Precious metals, which do not generate interest income, cannot compete with the other relatively safe assets.

Last week US Fed Vice chairman Stanley Fischer said that the Central Bank has nearly reached its targets. According to Fisher, unemployment rate of 5% is not far from the level of full employment, and according to the core price index of personal consumption expenditures (Core PCE), the core inflation is now at the level of 1.7%, which is very close to the target level of 2%.

Today, several US Fed representatives will give speeches: at 16:05 (GMT+3) William Dudley and James Bullard, and at 20:30 and 21:00 – Charles Evans and the member of FOMC Jerome Powell.

It is expected that the Fed representatives will confirm probability of the rate hike in December.

In this case the USD will continue to rise.

If it does not happen, the USD will go down in the short-term and the price of gold will go up.

However, it is very unlikely.XAU/USD: The price of gold is under pressure.  Fundamental analysis for 24/10/2016