Daily Gold Update: Wednesday, September 21 – Gold is Higher, but Still Within a Consolidation

Gold Price Recap

The gold futures contract lost 0.42% on Tuesday, September 20, as it extended a short-term consolidation following its last week’s Thursday’s sell-off. On Thursday it broke below the recent local lows following stock markets’ rout, strong U.S. dollar, monetary policy tightening fears. The market broke below the $1,700 level and on Friday it was the lowest since April of 2020. This morning the yellow metal is trading higher, but it remains within a consolidation, as we can see on the daily chart (the chart includes today’s intraday data):

Precious Metals Price Action

Gold is 0.6% higher this morning, as it is trading above the $1,670 level. What about the other precious metals? Silver is 1.5% higher, platinum is 2.0% higher and palladium is 1.1% higher. So the main precious metals’ prices are lower this morning.

Fundamentals and FOMC Historical Analysis vs Gold

Yesterday’s Building Permits/ Housing Starts releases have been mixed. Today we will get the crucial Fed’ Rate Decision release at 2:00 p.m. The markets expect a 0.75-percentage-point rise.

Where would the price of gold go following today’s Fed release? We’ve compiled the data since January of 2017, a 66-month-long period of time that contains of forty five FOMC releases. The first chart shows price paths 5 days before and 10 days after the FOMC release. The latest FOMC Statement release came out on July 27. Gold price was 5.5% higher 10 days after the release.

The following chart shows average gold price path before and after the FOMC releases for the past 45 releases. The market was usually declining ahead of the FOMC day. Then it was going up for a week-long period. We can see that on average, gold price was 0.68% higher 10 days after the FOMC Statement announcement.

Economic News Schedule

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days.

Wednesday, September 21

• 10:00 a.m. U.S. – Existing Home Sales
• 2:00 p.m. U.S. – FOMC Statement, Federal Funds Rate, FOMC Economic Projections
• 2:30 p.m. U.S. – FOMC Press Conference
• Tentative, Japan – Monetary Policy Statement, BOJ Policy Rate

Thursday, September 22

• 7:00 a.m. U.K. – Monetary Policy Summary, Official Bank Rate, MPC Official Bank Rate Votes
• 8:30 a.m. U.S. – Unemployment Claims, Current Account
• 10:00 a.m. U.S. – CB Leading Index m/m
• Tentative, Japan – BOJ Press Conference
• All Day, Japan – Bank Holiday

Paul Rejczak
Stock Trading Strategist
Sunshine Profits: Analysis. Care. Profits.

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Disclaimer

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