Modest price gains for gold as FOMC on deck

July 27, 2021

(July 27) Gold prices are trading firmer in early U.S. dealings Tuesday, seeing just a bit of support from a weaker U.S. dollar index as well as slight declines in the U.S. stock indexes. In focus now is the two-day meeting of the Federal Reserve’s Open Market Committee (FOMC) that begins Tuesday morning and ends Wednesday afternoon with a statement. Inflation and economic growth prospects will be the hot topics traders and investors want to see the FOMC meeting address.

Some market watchers are buzzing about the prospects of slower U.S./global economic growth and rising inflation, which in the past has been called stagflation. The conclusion of the meeting Wednesday afternoon, including Fed Chairman Jay Powell’s press conference, is likely to cause some market gyrations. August gold futures were last up $4.30 at $1,803.30 and September Comex silver was last down $0.038 at $25.28 an ounce.

Global stock markets were mixed to weaker overnight. The U.S. stock indexes are pointed toward weaker openings when the New York day session begins but still near their record highs. Overall risk sentiment remains upbeat at present, despite some worries about the pandemic flaring up in some countries, including the U.S. Solid corporate earnings reports are keeping equities prices elevated.

The marketplace is watching a meeting between U.S. and China officials this week, with  indications that the two nations remain wary of each other.

The key outside markets today see the U.S. dollar index slightly firmer. Nymex crude oil futures prices are near steady and trading around $72.00 a barrel. The yield on the U.S. Treasury 10-year note is presently fetching 1.25%.

U.S. economic data due for release Tuesday includes the weekly chain store sales index and the Johnson Redbook retail report, durable goods orders, the monthly house price index, the Case-Shiller home price index, the Richmond Fed business survey and the consumer confidence index.

Technically, gold futures bulls and bears are on a level overall near-term technical playing field. Bulls’ next upside price objective is to produce a close above solid resistance at the July high of $1,835.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at Monday’s high of $1,812.00 and then at $1,825.00. First support is seen at the overnight low of $1,792.80 and then at last week’s low of $1,789.10. Wyckoff's Market Rating: 5.0.

The silver bears have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing September futures prices above solid technical resistance at $26.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the March low of $23.825. First resistance is seen at last week’s high of $25.535 and then at $25.805. Next support is seen at $25.00 and then at the July low of $24.79.


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