Price pauses for gold, silver; FOMC minutes, Jackson Hole loom

(Kitco News, Wed. Aug. 21st, 2024) – Gold prices are a bit lower and silver a bit higher in early U.S. trading Wednesday. December Comex gold futures Tuesday hit a record high of $2,570.40. The precious metals markets are on hold ahead of key Federal Reserve releases that lie just ahead. December gold was last down $3.60 at $2,546.80. September silver was up $0.106 at $29.625.

Traders are awaiting this afternoon’s release of the minutes from last week’s Federal Open Market Committee (FOMC) monetary policy meeting. They will be looking for fresh clues on the size of the likely interest rate cut coming in September.

The marketplace is also awaiting the annual Jackson Hole Federal Reserve symposium that begins later this week. Past years have seen central bank officials make markets-moving pronouncements at the confab. Fed Chairman Powell is slated to speak at the symposium on Friday and may give some guidance on the size of an expected U.S. interest rate cut in September.

Broker SP Angel said this morning in an email dispatch: “Traders increased long positions in gold by 18% with greater than $6.7 billion worth of new futures contracts put on last week. U.S. investors are also seen buying gold ETFs to protect from a weaker U.S. dollar. Lower U.S. interest rates herald a weaker U.S. dollar, which should raise gold prices in U.S. dollar terms. Restocking and buying ahead of the Indian wedding season and by the jewelry trade ahead of Christmas tends to lift prices into the autumn. We also believe Chinese investors are buy gold as many private investors do not trust local banks or investment funds. China’s government has said property is for living in and not investing, pushing investors into other asset classes.”

Asian and European stock indexes were mostly lower overnight. U.S. stock indexes are pointed to slightly higher openings when the New York day session begins. The marketplace is more upbeat the past week, evidenced by the S&P 500 and Nasdaq stock indexes hitting four-week highs Tuesday.

The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are slightly up and are trading around $73.50 a barrel. The benchmark 10-year U.S. Treasury note is presently fetching 3.805%.

Other U.S. economic data due out Wednesday includes the weekly MBA mortgage applications survey and the weekly DOE liquid energy report.

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 $2,600.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,450.00. First resistance is seen at the overnight high of $2,558.00 and then at the contract high of $2,570.40. First support is seen at the overnight low of $2,542.60 and then at Tuesday’s low of $2,535.10. Wyckoff’s Market Rating: 8.5

September silver futures bulls have the overall near-term technical advantage and have momentum on their side now. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $30.00. The next downside price objective for the bears is closing prices below solid support at $28.00. First resistance is seen at this week’s high of $30.035 and then at $30.50. Next support is seen at Tuesday’s low of $29.255 and then at $29.00

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com