Gold continues to make gains against the dollar, and has moved higher for a third consecutive day. In North American trade, spot gold is trading at $1314.58, up 0.35% on the day. In economic news, CB Consumer Confidence improved to 122.9, above the forecast of 120.9 points. On Wednesday, the US releases two key events – ADP Nonfarm Employment Change and Preliminary GDP for the second quarter. The markets are expecting a strong gain of 2.7% from GDP, and a surprise reading could have a strong impact on gold prices.
Geopolitical events are once again driving the markets, with the US dollar under pressure. After a brief hiatus, North Korea is back in the news again, as the rogue country fired a missile over Japanese territory on Tuesday. Japan and the US have sharply condemned the missile launch, and with tensions once again climbing in the Korean peninsula, nervous investors have moved a way from stocks in favor of safe-haven assets such as gold. If the crisis continues, we can expect the gold rally to continue. Since Friday, gold prices have climbed 1.9 percent.
At the Jackson Hole meeting last week, Yellen did not discuss interest rate policy, choosing instead to emphasize that the financial regulations put in place since the financial crisis in 2008 should not be undermined. Her message appeared aim at Donald Trump, who has expressed his intention to relax banking and financial regulations which he has argued are hampering business. The markets remain skeptical about a third and final rate hike this year, as the odds of an increase in December have been falling – currently, the odds a December hike are at 35%, down from 42% a month ago.
