Gold rebounds from six-week low as dollar sags before Fed speeches

Marcus Newton
June 28, 2017

Investors were awaiting speeches by Federal Reserve officials for signs on whether the central bank will stick to its guns and raise rates this year.

Mr Williams reiterated the Fed's plans to start shrinking its US$4.5 trillion (S$6.25 trillion) balance sheet this year, and promised the Fed will normalise policy in a well-telegraphed, gradual manner so as to reduce unnecessary market disruption both at home and overseas.

Nasdaq 100 e-minis were up 20.25 points, or 0.35 percent, on volume of 19,720 contracts. On the Nasdaq, 1,533 issues rose and 857 fell.

"The euro has picked up against the dollar as, gaining over 0.5%". Joblessness dropped to 4.3 percent in May, a 16-year low. But it has spent the past two weeks trading below its June 8 record close, as investors have been reluctant to push the benchmark even higher.

Alphabet fell 1.2 percent to $960.55 after European Union antitrust regulators hit the tech giant with a record $2.7 billion fine. "That's why we think they're going to hike rates and we will see a steepening of the U.S. Treasury curve and that will be supportive of the U.S. going forward". The data is expected at 10 a.m. ET.

"Fed Chair Yellen is to discuss global economic issues, and the tone of her economic outlook will be closely watched after recent softer USA data for any implications for the interest rate outlook".

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"The Fed seems to have changed its policy response function".

Seven of the 11 major S&P 500 sectors were lower, with the telecommunications index's (.SPLRCL) 1.16 percent fall leading the decliners.

Speaking at the ECB's annual policy forum at Sintra in Portugal, Draghi highlighted a recovering euro zone economy and said that deflationary forces had been replaced with inflationary ones, but added that stimulus in the form of the ECB's monetary support was still needed.

While investors seem to have come to a consensus view that the USA dollar rally is coming to an end, Credit Agricole has offered a contrarian take: There is room for the greenback to strengthen.

"A weaker rand, along with stronger commodity prices, boosts our resources such as gold and we're seeing a rally in those", said BP Bernstein trader Vasili Girasis. Gold futures stepped higher. The chip maker on Tuesday unveiled more partnerships (http://www.marketwatch.com/story/nvidia-forges-more-partnerships-with-auto-makers-for-self-driving-tech-2017-06-27) in the hot self-driving vehicle arena, including an unusual joint venture between Swedish auto maker Volvo AB (VOLV-B.SK) and one of its suppliers.

Other reports by MaliBehiribAe

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