Gold price: Rally stopped because of the decision of trump Mexico
Even the possibility of a rate cut by the Federal reserve system could not stop the fall in the price of gold, since the decision of President Donald trump not to punish Mexico in the end have a greater effect.
The price of physical metal and gold futures fell from a 14-month high on Monday, ending an eight-day rally. The President’s decision not to continue to increase tariffs on Mexican imports partially lifted the negative sentiment in the global macro markets. Falling prices also gave the opportunity to buy cheap metal for those who wants to earn on the longest rally for gold this year.
Spot gold, reflecting bullion trades, was trading at 1327,64 dollars per ounce during the American session, down 12.94 USD or 1% per day. On Friday the price reached the high of April 2018, amounting to 1 348,34 dollar.
The gold futures for August delivery traded on the Comex division of the new York Mercantile exchange, fell 16,80 USD or 1.25%, to 1329,30 dollars per ounce. Last session, he reached the February high of $ 1352,55.
The August contract for gold rose nearly $ 70, or nearly 5.5%, in the period from 28 may to 7 June. Despite the drop on Monday, the short-term Outlook for gold remains positive due to bets that the fed will have to cut interest rates after released weak employment data in the United States.
Gold experts suggest that the August gold futures will rise to $ 1,400 an ounce, from now until June 19 when the fed should issue its next statement on monetary policy after its monthly meeting. Although the Central Bank should not directly make the decision about the reduction of interest rates in this round, traders will be closely watching the wording in the accompanying statement to gauge how weak he was, and whether it is possible to expect easing in the coming months.
The futures on the Federal funds this year are estimated at least half of the reduction, and in 2020 and by another 40 basis points. The probability of lower interest rates by December is almost 100%. The fed Chairman Jerome Powell reassured markets last week that the Central Bank will do everything possible to protect the U.S. economy from the recession due to trade wars, as well as to maintain nearly a decade of record growth.
The material is provided,
The Company FxOpen