TDS: Expected FOMC Tightening To Remain Headwind For Gold

Whereas gold has bounced sharply since its late-November lows, TD Securities still anticipates weakness in the months ahead as expectations for tightening from the Federal Open Market Committee continue. “Given that TD Securities expects the Fed to start removing monetary accommodation in the early part of H2 2015, a firming U.S. dollar throughout the next year and spec exhaustion, we are sticking to our guns and remain quite negative on gold for much of the early part of 2015,” TDS says. “Indeed, it would not at all be surprising if gold dropped below $1,100/oz in the early part of 2015. The upcoming FOMC communiqué (on) Dec. 17th may be the catalyst which sends gold into a freefall toward new cyclical lows. Following a strong U.S. employment market report, the U.S. central bank is quite likely to remove the pledge to keep rates low for a ‘considerable time.’ This no doubt would bring forward the timing for the first rate hike away from the zero bound…. The prospects of higher rates increase carry costs and the opportunity to hold gold relative to fixed-income assets. Similarly, the prospects for an earlier-than expected increase in the Fed funds would help the U.S. dollar to continue its impressive rally—which is traditionally bad for gold. The big downside risk for gold and upside risk for the U.S. dollar could come to fruition if the ECB (European Central Bank) undertakes some sort of unexpectedly aggressive asset purchase action in early-2015 as happened in the aftermath of the BOJ QE (Bank of Japan quantitative-easing) program augmentation announcement.”

Gold Steady-Weaker on Upbeat U.S. Data, Firmer U.S. Dollar and on Chart Consolidation

Gold prices ended the U.S. day session steady in the cash market and modestly lower in the futures Thursday, on some chart consolidation after Tuesday’s big gains. Some upbeat U.S. economic data and a higher U.S. dollar index also helped to pushed gold prices to their session lows in morning U.S. trading. Still, the near-term technical postures for both gold and silver have improved this week. February Comex gold was last down $3.70 at $1,225.70 an ounce. Spot gold was last up $0.10 at $1,226.75. March Comex silver last traded down $0.102 at $17.085 an ounce.

Industrial Demand For Silver To Grow 27% By 2018 – Silver Institute

(Kitco News) – Growing industrial applications for silver will increase demand for the metal by 27% within the next four years, according to a report released Wednesday by the Silver Institute.

Dubai’s DGCX ‘Named’ Exchange Of The Year For Middle East and Australia

(Kitco News) – Dubai’s reputation as an international gold and commodities trading hub continues to grow as the Dubai Gold and Commodities Exchange was named Exchange of the Year for 2014 in the Middle East and Australia.

U.S. Weekly Jobless Claims Falls By 3,000 To 294K

(Kitco News) – First-time weekly jobless claims in the U.S. fell by 3,000 to a seasonally adjusted 294,000 during the week to Saturday, the Labor Department said Thursday.

HSBC: Physical Demand, Less Supply To Support Silver In 2015; Dollar, Weak Commodities To Cap Upside

HSBC is retaining its average price forecast of $17.65 an ounce for silver in 2015 – meaning a rise from current prices – although the bank looks for rallies to be limited by a stronger U.S. dollar and weaker commodities generally.

Natixis Sees 2015 Average Gold Price of $1,140/Oz; Silver At $15.20

(Kitco News) – An improving U.S. economy will be the main influence in the price of gold in 2015, as the dollar strengthens and U.S. interest rates may rise, said Natixis on Thursday.

U.S. Advance Retail Sales 0.7% In November

(Kitco News) – U.S. consumers made more purchases last month, as the holiday shopping season kicked off, according to data from the U.S. Census Bureau.

Gold Weaker on Corrective Pullback, Chart Consolidation

Gold prices are moderately lower in early U.S. trading Thursday, on a downside technical correction and chart consolidation after Tuesday’s big gains. Still, the near-term technical postures for both gold and silver have markedly improved this week. February Comex gold was last down $6.50 at $1,223.00 an ounce. Spot gold was last down $2.40 at $1,224.25. March Comex silver last traded down $0.112 at $17.08 an ounce.

Push and Pull

The yanking this way and that by fundamental forces now growing wilder and woollier by the day, left gold almost becalmed in a sea of madness.

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