Gold and Jackson Hole

Gold and Jackson Hole
Analysis
Ahura Chalki
Author:
Ahura Chalki
Published on: 26.08.2021 18:29 (UTC)
Post reading time: 1.51 min
147

Different scenarios and Gold reaction! 


The Jackson Hole Economic Symposium is an annual meeting, hosted by Kansas Federal Reserve since 1978, and held in Jackson Hole, Wyoming State, since 1981. The aim is to focus on important economic issues and different banking theories. Participants include well-known central bankers and finance ministers, as well as outstanding academics and researchers from all around the globe.


Always it is very important for financial markets. Since most of the participants are financial leaders, any specific comments from them can change the market directions, that's why it is always in the center of attention. 


  1. For Gold, now eyes turn to Fed Chair speech on Friday and according to his stance will find its direction. We will have three different scenarios there:
  2. Dovish policy! For now, it is impossible to see the FED announce new stimuli or decrease the interest rates, so let's ignore that. 
  3. Holding the current policies. Currently holding the policies means a dovish tone. 
  4. Hawkish stance. Increasing the rates is not something that we can expect, for now, so everything is about tapering, what is important to know is the Fed Chair's outlook on when and how to make it. Starting from November, December, or even next year. 


A hawkish message means less support from stock markets. US dollar will jump on the message and Gold will be under pressure in the short term, while in the mid-term, money flow out of stock will be looking after Sa-Haven, and Gold again will be considered. 


On the other hand, any Dovish stance means stocks still can get more attention and invest, lower demand for USD. Weaker USD will lift the Gold in short term, but in the mid-term, the boom in the stock market will be negative for the Gold market. 



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