Metals soft heading into Jackson Hole

Precious metals have eased in the lead up to Jackson Hole, with the gold price off over 2% since last week, whilst silver has fallen back below USD $19oz, down more than 6% since the middle of August. The pullback is not entirely unexpected, with Stanley Fischer, Federal Reserve vice chair recently reinforcing the view that there is scope for more monetary tightening this year, though whether or not this is the tone that the market takes out of Jackson Hole remains to be seen. As per our latest technical update, there is support for gold around the USD $1312oz level, and below that USD $1288oz, though we’d stress that the overall trend remains positive. Shorter-term though, the risks have been, and likely remain to the downside, especially if shorts gain more conviction about the next move, and increase their positioning accordingly. For AUD gold investors, downside will be limited by a likely fall in the currency, with targets down to the mid USD $0.74 levels for the local currency (VIEW LINK)