Kinesis Money – Macroeconomic Analysis
The U.S. inflation data missed the expectations. Indeed, the core Consumer Price increased by merely 0.1% over the past month, while forecasts were prognosticating a more significant rise of +0.3%.
It is clear that these last figures are reducing the pressure on the Federal Reserve for hastened tapering (the process for the reducing liquidity).
The Federal Reserve’s Open Market Committee will meet on September 21-22. However, the chances for the announcement of the beginning of the process during this month’s meeting decreased significantly. Most investors are now expecting the tapering to be announced during the following summit, at the beginning of November.
In other words, the Federal Reserve is expected to be more cautious in scaling back pandemic-era bond purchases, in order to continuously sustain the recovery of the economy.
What are the consequences of this on the financial markets? Overall, we have seen a modest impact on the stocks, even if growing chances of the Fed postponing the tapering are a supportive market driver. On the other hand, this is a bearish element for the U.S. Dollar. A sure winner is definitely gold. Indeed a low-interest rate scenario decreases the real cost of holding bullion.
Kinesis Money – Gold Analysis
U.S. inflation data below expectations has been supportive news for gold. Bullion recovered the $1,800 mark, remaining in the lateral trading range between $1,790 and $1,820.
In the current scenario, it is difficult finding a clear trend. Indeed, investors are waiting for more clarity from the Fed in regard to the expected tapering. This probably won’t be clarified until September’s meeting, increasing the chances of keeping bond purchases in the current limbo, awaiting a clearer directionality.
A new fall below $1,785-1,790 could be seen as the weakness signal, while a clear surpass of $1,820 could open space for new recoveries.
Kinesis Money – Silver Analysis
Silver has shown some volatility in the last 48h, with two quick declines to $23.4 and $23.5. The scenario remains weak, but there is good news. Both times, when silver declined, buyers were really active, helping the price to rebound quickly. They are seeing dips as a buying opportunity. Even if there is not yet any clear bullish trend on silver, the bearish pressure seems to be losing strength.
A clear surpass of the resistance zone placed at $24 and $24,3 would represent a positive signal for silver.
Carlo Alberto De Casa is Market Analyst for Kinesis Money.
He also writes as a technical analyst for the Italian newspaper La Stampa.
Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a commentator for CNBC Italy. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a book on gold and the gold market, followed by a new updated edition in 2018.
This report is not an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance.
