Gold, silver rally after “bold” Federal Reserve rate cut

(Kitco News) – , Thurs. Sep 19th, 2024) – Gold and silver prices are solidly higher in midday U.S. trading Thursday, with gold not far below Wednesdsay’s record high and silver notching a two-month high today. The precious metals bulls are basking in the aftermath of an aggressive interest rate cut from the U.S. central bank that weakened the U.S. dollar. December gold was last up $18.40 at $2,617.10 and December silver was up $0.738 at $31.42.

Trader and investor sentiment is upbeat around the globe after the Federal Reserve aggressively cut its main interest rate by 0.5% on Wednesday and signaled more cuts to come. A Wall Street Journal headline today reads: “The Fed’s bold move ripples through global markets.”

Tensions remain higher in the Middle East following the simultaneous exploding of thousands of pagers used by Hezbollah militia members in Lebanon on Tuesday, followed by hundreds of exploding walkie-talkies used by Hezbollah in Lebanon on Wednesday. Several people were killed and a few thousand were wounded in the attacks. Hezbollah, which has a massive battery of missiles, has vowed retaliation against Israel. It’s somewhat surprising to this longtime markets watcher that the markets have not focused more upon and reacted with keener risk aversion to this geopolitical matter. If the situation escalates further, safe-haven bidding for gold and silver will significantly increase.

The key outside markets today see the U.S. dollar index a bit higher after selling off and hitting a contract low Wednesday after the Fed rate cut. Nymex crude oil prices are firmer and trading around $72.25 a barrel. The benchmark 10-year U.S. Treasury note yield is on the decline and is presently fetching around 3.75%.

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 $2,750.00. 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 $2,627.20 and then at $2,650.00. First support is seen at $2,600.00 and then at this week’s low of $2,572.50.

December silver futures bulls have the firm 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 pool for the bears is closing prices below solid support at $29.00. First resistance is seen at $32.00 and then at $32.46. Next support is seen at $31.00 and then at $30.50.

Posted by:

Jack Dempsey. President

401 Gold Consultants LLC

jdemp2003@gmail.com