Gold and silver see price strength ahead of FOMC meeting results

September 16, 2020

New York (Sept 16)  Gold and silver prices are modestly up in early U.S. trading Wednesday. The key “outside markets” are again in a bullish daily posture for the precious metals markets at midweek. The U.S. dollar index is lower and crude oil prices are higher. Crude oil has made a good rebound from its recent losses, which gives the raw commodity bulls, including the metals bulls, better confidence their markets can sustain some price uptrends. October gold futures were last up $6.50 at $1,964.50 and December Comex silver was last up $0.076 at $27.545 an ounce.

Global stock markets were again mostly up overnight. U.S. stock indexes are set for higher openings when the New York day session begins. Trader and investor risk appetite remains keener at mid-week as global stock markets have generally rebounded from selling pressure that began the month of September. Gold and silver market bulls are impressed their safe-haven metals are showing resilience amid the upbeat attitudes.

In focus today, the U.S. Federal Reserve concludes its two-day monetary policy meeting this afternoon with a statement and press conference from Fed Chairman Jay Powell. The Fed’s post-FOMC meeting statement and Powell’s remarks will be closely scrutinized for more clarity on the Fed’s shift to an easing of its inflation guidelines. The Bank of England and Bank of Japan also have monetary policy meetings this week.

In overnight news the OECD think tank projected the global economy to contract by 4.5% in 2020, which is a bit better than its June forecast of 6.0% contraction. The OECD also said the world economy could grow by 7.0% in 2021, provided Covid restrictions are lifted and an effective vaccine is found.

The important outside markets today see the U.S. dollar index lower again. Nymex crude oil prices are higher and trading around $39.25. The yield on the U.S. Treasury 10-year note is trading around 0.68% today.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, retail sales, the NAHB housing market index, manufacturing and trade inventories, the weekly DOE liquid energy stocks report and Treasury international capital data.

Technically, the gold bulls have the firm overall near-term technical advantage and have gained momentum early this week. Prices are in an overall near-term uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at the September high of $1,992.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at this week’s high of $1,973.80 and then at the September high of $1,992.50. First support is seen at the overnight low of $1,949.10 and then at this week’s low of $1,937.00. Wyckoff's Market Rating: 7.0

December silver futures bulls have the firm overall near-term technical advantage. Prices are still in an overall price uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the August high of $30.19 an ounce. The next downside price objective for the bears is closing prices below solid support at the August low of $23.80. First resistance is seen at this week’s high of $27.865 and then at $28.00. Next support is seen at the overnight low of $27.20 and then at $27.00.


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