Gold price pausing as FOMC meeting looms

(Kitco News, Tues. Sep. 17th, 2024) – Gold and silver prices are slightly lower in early U.S. trading Tuesday, as the two precious metals and the general marketplace are very tentative just ahead of the most important U.S. data point of the month. December gold was last down $1.00 at $2,607.90 and December silver was down $0.01 at $31.125.

The Federal Reserve’s Open Market Committee meeting (FOMC) begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The marketplace thinking has shifted recently, now slightly favoring a 0.5% rate cut, after earlier reckoning a 0.25% rate cut was most likely. The CME’s FedWatch Tool is currently putting a 67% probability of a 50 basis-point cut, while the likelihood of the smaller 25 basis-point cut has slipped to 33%. The Bank of England and the Bank of Japan hold their regular monetary policy meetings Thursday.

Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed to higher openings when the New York day session begins. The U.S. stock indexes have made good recoveries from their early-September swoons.

In overnight news, Israel announced that halting Hezbollah’s attacks in the north in order to allow its residents to return is now an official war goal, as the country considers a wider military operation that could ignite an all-out conflict, according to the Associated Press. The Middle East tensions are helping to keep a bid in the safe-haven gold and silver markets.

The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are near steady and trading around $70.25 a barrel. The benchmark 10-year U.S. Treasury note yield is on the decline and is presently fetching 3.621%.

A busy U.S. economic data day Tuesday sees the weekly Johnson Redbook retail sales report, the monthly retail sales report, industrial production and capacity utilization, the NAHB housing index, and manufacturing and trade inventories.

Technically, December gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,700.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,500.00. First resistance is seen at the record high of $2,617.40 and then at $2,625.00. First support is seen at the overnight low of $2,596.90 and then at $2,585.00.

December silver futures bulls have the overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the July high of $32.46. The next downside price objective for the bears is closing prices below solid support at $29.00. First resistance is seen at this week’s high of $31.46 and then at $32.00. Next support is seen at $30.67 and then at $30.00.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com