Safe-Havens Muted As FOMC Approaches

Posted Tuesday, July 30, 2019 by
Shain Vernier • 1 min read

As with most other markets today, trade of safe-havens has been muted ahead of the pending FOMC Interest Rate Announcements. With the U.S. indices near flat, it appears that the story of the day is the non-committal stance being taken by traders and investors across almost all asset classes. At this point, FOMC anticipation and caution are the lead stories of the day.

On the economic news front, there were a few secondary events worth noting during the U.S. pre-market and early session. Here are the highlights:

Event                                                                                   Actual      Projected     Previous

Core Personal Consumption (MoM, June)                       0.2%             0.2%               0.2%

Personal Income (MoM, June)                                            0.4%             0.4%              0.4%

S&P Case-Shiller Home Price Indices (YoY, May)            2.4%              2.4%              2.5%

Aside from a slight decline in home prices, these figures came in largely unchanged. Perhaps the largest event this morning were the reported gains in U.S. Consumer Confidence. The figure came in well above expectations, a signal that spending and economic growth still remain in positive territory.

Safe-Havens Turning In A Muted Session Ahead Of The FOMC

Safe-haven assets are trading sideways today, led by compression in August GOLD futures. In addition, the USD/CHF is tight, as is the USD/JPY. For the time being, traders are taking a wait-and-see approach ahead of tomorrow’s FOMC announcements.

August Gold Futures (GC), Daily Chart
August Gold Futures (GC), Daily Chart

Here are the levels to watch for August gold ahead of the FOMC:

Overview: For the past week and a half, pinpointing a direction for the gold market has been a challenge. However, the picture should clear up a bit after the FED makes its long-awaited interest rate announcement tomorrow. 

Expect more of the same from the safe-havens until the FOMC and FED issue the policy directive Wednesday. Right now, traders are content on the sidelines until the situation becomes a bit clearer.

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