Gold remains well bid awaiting Fed decision

OUTSIDE MARKET DEVELOPMENTS: The Fed will announce policy later today. Despite rising uncertainty associated with trade and tariffs, the FOMC is expected to leave interest rates unchanged.

This will leave the market to focus on the forward guidance, economic projections, and Powell's presser. Recent action in Fed funds futures suggests the market is positioned for a hawkish hold.

The BoJ held steady on rates in line with expectations. The central bank expressed concerns about "high uncertainties...including the evolving situation regarding trade and other policies."

The BoE will also likely be on hold when they announce policy on Thursday. Amid rising trade and geopolitical tensions, a dovish tilt seems likely.

President Trump said he had a "very good call” with Putin on Tuesday with Russia agreeing to halt attacks on Ukrainian energy and infrastructure targets, and a prisoner exchange. “The next thing would be a full ceasefire and a deal,” Trump said.

Trump and Ukrainian President Zelensky are speaking today. Zelensky has expressed his desire to reach a peace deal. 

Israel broke the ceasefire with Hamas on Tuesday, launching airstrikes against numerous targets throughout Gaza. President Trump and Israeli PM Netanyahu laid the blame on Hamas for their refusal to release the remaining hostages and return to the negotiating table.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CST: +$0.99 (+0.03%)
5-Day Change: +$95.28 (+3.25%)
YTD Range: $2,607.16 - $3,044.13
52-Week Range: $2,151.06 - $3,044.13
Weighted Alpha: +40.47

Gold set a new all-time high at $3,044.13 in overseas trading before adopting a consolidative intraday tone ahead of today's Fed decision. Safe-haven interest and a weak dollar remain broadly supportive.

 

Barring some dramatic shift in the Fed's bias, the outlook for gold will remain favorable with dips offering buying opportunities. A more hawkish tilt may present some short-term downside risk, particularly in light of the redeveloping overbought condition.

Today's London low at $3,025.84 marks initial support and protects the more important $3,003.04/$3,000.00 level. Below the latter, $2,982.85/80.54 stands in front of the old record high at $2.955.40.

On the upside, the next target is the measuring objective at $3,049.34. Beyond that, $3,100 and the $3,149,84 Fibonacci projection will attract.

Silver is trading lower after failing to sustain five-month highs above $34 on Tuesday. Ongoing global trade uncertainty is offsetting some of the optimism associated with German spending plans and Chinese stimulus.  



From a technical perspective, recent gains bode well for an eventual challenge of the more than 22-year high set last year at $34.853 (22-Oct). Beyond that, the $35.348 high from October 2012 would be in play.

Monday's low at $33.495 has contained the downside thus far, but further retracement can't be ruled out. If this support gives way, previous resistance at $33.340 protects the $33.000/$32.961 level.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

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