Gold has ticked lower in the Tuesday session. In North American trade, the spot price for an ounce of gold is $1339.51, down 0.13% on the day. On the release front, CB Consumer Confidence rose to 125.4, above the estimate of 123.2 points. Later on Tuesday, President Trump will deliver his State of the Union address before Congress. On Wednesday, there are a host of key indicators in the US, led by ADP Nonfarm Employment Change. The Federal Reserve will release a monetary policy statement, with the markets expecting the benchmark rate to remain unchanged at a range between 1.25%-1.50%.
Gold took advantage of last week’s USD selloff, but the dollar has steadied this week. Gold moved higher earlier on Tuesday, but these gains were mostly wiped out after a superb consumer confidence report. CB Consumer Confidence continues to move upwards, as the US consumer is showing strong optimism about the economy. This has triggered stronger consumer spending, which led to a surge of imports in Q4, weighing on Advance GDP, which was softer than expected at 2.6%.
All eyes are on the Federal Reserve, which will make a rate announcement on Wednesday, the final one under Janet Yellen’s watch. The tone of the rate statement could affect investor sentiment and have an impact on gold prices. It’s a virtual certainty that the Fed will leaves rates unchanged this time around, although it’s likely that the Fed will raise rates by a quarter-point at the March meeting. Yellen will make way for Jerome Powell, who takes over as chair in early February. Powell is expected to hold the course on monetary policy, which was marked by small, incremental interest rates in order to keep the robust US economy from overheating.
