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 Gold is trading modestly higher after probing briefly below $1200
in thin holiday trading on Monday. The yellow metal remains generally
defensive amid revived expectations in recent weeks that the Fed will hike
rates this summer.
FedSpeak since the surprisingly hawkish minutes of the April FOMC meeting
were released seems to be trying to move the expectations needle further,
which will at least give the central bank the option to move if they choose
to. Late last Friday, Fed chair Yellen addressed the question, saying that
"probably in the coming months such a move would be appropriate."
That sounded kind of wishy-washy to me, but the market didn't seem to think
so. The dollar index set a 9-week high, weighing on gold in the process.
Today's raft of economic data were a bit of a mixed bag again, highlighting
once again the unevenness of the data the Fed claims to be dependent on:
Personal income was inline with expectations. PCE was higher than expected.
Both the Chicago and Dallas Fed indexes were pretty significant misses.
Consumer confidence plunged to a 10-month low.
On top of that, the latest poll out of the UK suggests that Brexit remains a
real possibility. A new Guardian poll reveals a 52-48 preference toward
leaving the EU. If there's a chance that the UK will leave, it might be
difficult for the Fed to pull the trigger a week before a potentially huge
disruption.
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