GOLD & CRUDE OIL TALKING POINTS:
- Gold prices[1] fell as markets groaned at slow-moving ECB stimulus expansion
- Crude oil prices[2] down alongside stocks as traders pine for more policy easing
- Soft US GDP data may sour risk appetite, hurt gold as USD[3] claims haven bid
Gold prices slumped as the ECB appeared to be in less of a hurry to expand monetary stimulus than investors anticipated[4]. That drove bond yields sharply higher and ultimately echoed in a stronger US Dollar[5], cooling the appeal of non-interest-bearing and anti-fiat assets.
Tellingly, the drop in gold tracked parallel to plunging stocks and crude oil prices. Investors seemed clearly unnerved by what they judged as an unwelcome lack of urgency in delivering policy support, signaling that their assessment of global growth prospects is far gloomier than that of central bank officials.
Gold Prices May Fall with Stocks, Crude Oil on Soft US GDP Data
This sets the stage for the release of second-quarter US GDP data, where expectations envision the slowest annualized growth rate in three years (at 1.8 percent). Leading PMI data has argued as much for some time and a string of recent disappointments on US news-flow warns the realized result may be softer still.
Markets seem to have run out of room to price in ever-more dovish Fed policy outcomes[6]. Investors were perhaps hoping for a bit of extra help from the ECB, but its tiptoeing appears to have left them wanting. That sets the
