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Gold traders watching macro data, FOMC, geopolitical tension and gold’s seasonal pattern in September

After rising 6.35 percent in August, the U.S. Comex gold futures jumped 1.14 percent on 3 September to $1,411.70 after the Labour Day weekend. The Dollar Index also rose 0.33 percent after rising 0.78 percent last month. The S&P 500 Index increased 0.42 percent on the first day of trading in September after dropping 3.13 percent in August while the Euro Stoxx 50 Index surged 1.18 percent this month after falling 1.69 percent last month. The U.S. 10-year Treasury bond yield surged from 2.7839 percent at the end of August to as high as 2.9105 percent but settled at 2.8576 percent on Tuesday.

Stronger Manufacturing Growth Globally
The U.S. ISM Manufacturing Index jumped to 55.7 in August, the highest level in 26 months. The U.S. manufacturing growth is led by a jump in construction spending, new orders and exports demand. The ISM increase and the expectation of the Fed’s tapering this month have strengthened the U.S. Dollar. The China official PMI Index in August jumped to 51, a three-year high, compared to an expectation of 50.6. The Eurozone August PMI also rose faster than expected due to the growth in Spain and Italy.

Gold Market Zeros in the Middle East Tension and Rising Uncertainties
Despite the strength in the U.S. Dollar, the gold has reasserted its role as the safe haven as the uncertainty in the Middle East influences sentiments this month. The gold futures reacted positively to the news that the U.S. house speaker John Boehner supported President Obama’s call for the Congress to approve a war on Syria. The rising market uncertainties are likely to lead to a rise in the “fear index” in September. At the same time, a chart from the seasonal trader.com shows that September is a “golden month” for gold, with the gold price falling in only five Septembers over the last 25 years.

This week’s U.S. payroll numbers and the unemployment rate will give more hints to the Fed’s likely actions in the FOMC meeting this month. Policy meetings, macro data, geopolitical news, and seasonal gold pattern will dominate gold trading in September.

This story is provided by Sharps Pixley, for more information and content please visit: www.SharpsPixley.com

04 Sep 2013 | Categories: Gold

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