Gold prices have steadied on Tuesday, as the spot price stands at $1309.23 per ounce late in the European session. Gold slipped about 2% on Monday, as the pair fell close to the $1300 level. On the release front, Monday's highlights are Core Retail Sales and Retail Sales. As well, Federal Reserve chair Janet Yellen will begin two days of testimony on Capitol Hill.
Janet Yellen visits Capitol Hill this week, starting with testimony on Tuesday before the Senate Banking Committee. The Federal Reserve minutes, released last week, did not shed much light on when the Fed plans to raise interest rates, but policymakers did agree to wind up the QE scheme by October. The asset purchase program flooded the economy with over $2 trillion, and the Fed has been steadily reducing the program since last December. Winding down QE, which currently stands at $45 billion/month, will require several more tapers by the Fed, but that shouldn't pose a problem, as the US economy continues to improve. The markets will be closely following Yellen's remarks, looking for clues regarding the timing of a rate hike.
The ECB had hoped that its rate cutting in June would inject some life into growth and inflation levels. So far, the results have been less than impressive, as inflation and manufacturing numbers in Germany and France, the two largest economies in the eurozone, remain at very low levels. A strong euro has not helped matters, as it makes European exports more expensive and weighs on growth. If the trend of weak figures continues, the ECB will face more pressure to take action at its next policy meeting.
XAUUSD, July 15, 2014 -
