Gold slips on Yellen’s hawkish speech, oil down

Otmane El Rhazi from The Bullion Desk.

Gold prices were down modestly in the early morning US trading session as Federal Reserve chairwoman Janet Yellen indicated a likely interest rate rise in 2015.

Gold for August delivery on Comex division of the New York Mercantile Exchange was last down $2.00, or 0.2 percent, to $1,151.50 per ounce. Trade has ranged from $1,150.30 to $1,155.80.

Speaking to the House Financial Services Committee in Washington DC, Yellen reiterated her previous speech on July 10 about an expectation for raising rates for the first time in nearly a decade.

“If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target,” Yellen said Wednesday.

In Europe, the International Monetary Fund (IMF) has withdrawn support for the latest Greek proposal citing an inability for the country to repay existing loans without reducing the debt burden.

The proposal heads to parliament today where Prime Minister Alexis Tsipras must rely on opposition support to get the reforms passed.

Equity markets in the eurozone are optimistic in the interim with Germany’s DAX and France’s CAC-40 up 0.1 percent and 0.3 percent respectively, while the euro was 0.3 percent weaker at $1.0974.

In data, China’s GDP growth in the second quarter at seven percent was unchanged from the first quarter but better than the expected reading of 6.9 percent.

Industrial production climbed to 6.8 percent from 6.1 percent and fixed asset investment was unchanged at 11.4 percent, which was better than the expected 11.2 percent. Retail sales climbed 10.6 percent from 10.1 percent previously.

But the CSI closed three percent lower on Wednesday – the solid data makes the possibility of further stimulus measures from Beijing less likely. The Nikkei closed up 0.38 percent, while the Hang Seng closed down 0.26 percent.

Meanwhile in the States, US PPI month-over-month in June was up 0.4 percent, above forecast of 0.2 percent, while Core PPI month-over-month in June also exceeded expectations at 0.3 percent.

Additionally, Empire State manufacturing index was at 3.9, besting forecast of 3.4

The US capacity utilisation rate, industrial production and crude oil inventories are due later.

Investors will likely pay particular attention to oil inventories as the Iranian nuclear resolution announced yesterday is expected to bring additional supply to an already saturated crude market. Light sweet crude (WTI) oil futures on the Nymex were down 50 cents or 0.9 percent to $52.54 per barrel.

As for other precious metals, Comex silver for September delivery was last down 1.4 cents to $15.175 per ounce. Trade has ranged from $15.150 to $15.360.

Platinum for October delivery fell $5.50 to $1,022.90 per ounce, while the most actively traded palladium contract was at $651.95 per ounce, down $5.15.

(Editing by Tom Jennemann)

The post Gold slips on Yellen’s hawkish speech, oil down appeared first on The Bullion Desk.