Gold Spot Price Forecast

Cassie Bastien

9/20/2017 11:39:43 AM

Daily Gold & Silver Market Report – 09/20/2017

The price of Gold finally rebounded from a two-week low Wednesday in reaction to a weaker dollar, yet many investors are concerned this rebound wont last. James Hyerczyk with NASDAQ said, “Treasury yields are likely to rise if the [Federal Reserve] is hawkish. This should make the U.S. dollar a more attractive investment while weakening foreign demand for dollar-denominated Gold.” However, if the Fed is dovish, Hyerczyk predicts stocks to soar, hurting demand for lower-risk assets such as Precious Metals. “The Fed is expected to announce a lowering of monthly bond purchases, starting in October,” while also leaving open the possibility of a rate increase at their December meeting. If the Fed casts doubt on a December rate hike, markets could turn bullish for Gold prices.

U.S. Dollar Remains Fragile

As investors await the Federal Reserve's highly-anticipated monetary policy statement due Wednesday, the dollar remains fragile. According to Investing.com, “The U.S. central bank was widely expected to leave interest rates on hold, but it was also likely to announce plans to trim its $4.2 trillion in bond holdings.” Traders are also cautious at the potential of rising U.S.-North Korea tensions following hawkish statements from President Donald Trump. Bank of England Governor Mark Carney said interest rates are likely to rise “over the coming months”, reiterating what was said at the Bank of England's most recent policy meeting.

Oil Prices Forecast to Hit Biggest Rise Since 2004

Amanda Cooper with Reuters said oil prices are headed for a near-16 percent rise, the largest third-quarter gain in 13 years, “after the Iraqi oil minister said [the Organization of Petroleum Exporting Countries] and its partners are considering extending or deepening output cuts aimed at reducing a global supply glut.” FXTM Analyst Lukman Otunuga said, “As investors become increasingly optimistic over OPEC’s effort to stabilize the saturated markets, the cartel should be encouraged to extend the current deal, which may fuel the upside.” However, Commerzbank Strategist Carsten Fritsch said, “I can’t see the market tightening unless OPEC cuts output further next year.” Further information will come Wednesday when the U.S. Department of Energy releases official data on inventories and refinery activity.

At 12:38 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,315.10 Up $5.50
• Silver, $17.39 Up $0.08
• Platinum, $944.90 Down $7.30
• Palladium, $915.60 Up $4.40

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