Market Nuggets: INTL FCStone Sees Gold Range-Bound In August Before Fall in September
Tuesday July 30, 2013 8:52 AM
INTL FCStone looks for gold to be range-bound in August before potential Federal Reserve-inspired weakness in September. The market rose over the last month, helped as Fed officials went out of their way to reframe the central bank's message, emphasizing that policymakers will remain accommodative even if they begin to taper quantitative easing. Other central banks have followed suit; with the European Central Bank saying it will remain easing, the Liberal Democratic Party's victory in Japanese elections seen as a resounding endorsement of the government's expansionary policies, and China seemingly opening the door to some stimulus, INTL FCStone says. "We think gold prices will remain somewhat stable going into August and expect to see a $1,270- $1,390 trading range in place," the firm says. "However, prices could head lower going into September, as investors will likely conclude that despite all the Fed's sugarcoating and varying timetables, the central bank is indeed entering a tightening phase, something that is fundamentally not constructive for gold going forward.