17th May 2016

Gold ended slightly higher last week amid very choppy trading conditions, but so far in May, prices have been edging lower, unable to sustain closes above $1300 resistance. 

Much of gold’s lackluster performance of late is attributable to the stronger dollar, which has now been up for four of the last five weeks against a basket of major currencies. The greenback has been pushing higher on account of more resilient US macro data and on growing uncertainty about a looming Fed rate decision out next month. In this regard, more Fed governors are pushing for a rate increase, citing rising inflation and wage pressures. On the macro side, the most notable recent release was Friday’s retail sales number, which ticked up by 1.3% from a month earlier to a oneyear high. Partly in response to the stronger number, Macroeconomic Advisers raised its forecast for Q2 GDP growth forecast to 2.3% (annualized) from 2%, while Barclays raised its estimate to 2.2% from 2%. The Federal Reserve Bank of Atlanta’s estimate also hiked its number to 2.8% from 2.2%.

News article attributed to www.bulliondesk.com