Gold Sideways Ahead the Fed, Palladium Rallies to 1,500

Gold is moving in consolidation mode as investors are waiting for the Federal Reserve decision on interest rates. Also, digesting a possible meeting between Trump and Xi to discuss the trade war.

The FOMC is the theme of the day as investors see it as the catalyst to push movements and trends in the whole investment industry. Equities rallied on Tuesday amid rate cut hints speculations, but today are sideways.

Metals are quiet waiting for the event. The dollar index is trading negative in the day, but a small range between 97.40 and 97.60.

Metals report on June 19, 2019

Gold failed to test the 1,360 level again on Tuesday, and it is now trading down to 1,340, where the pair is moving sideways as investors are waiting for the Fed. Technical studies suggest more gains in the short term, but the conditions are losing steam.

Silver is trading down on Wednesday as the pair was not able to break above the 15.10 level and it got rejected again on Tuesday. The unit is now back at the 200-day level of 14.90, waiting for developments in the Federal Reserve meeting.

Copper is consolidating levels after the latest rally performed in the last two days that took the unit from 2.600 to test the critical resistance at 2.700. XCU/USD is now trading 0.60% negative on the day at 2.6850. Technical studies suggest more room for the upside.

Palladium is extending its multi-day rally from 1,320 traded on June 5 to test the critical 1,500 area. XPD/USD is now trading at highs since March 27 around 1,499. The pair looks overbought and ready to break above the 1,500 area.

Platinum remains contained by the 20-day moving average at the 805.00. XPT/USD is now trading negative, but overall it is moving in a range between the critical support at 790.00 and the mentioned moving average at 805.00. Indicators are mixed.

Federal Reserve to clear path for a rate cut

Perhaps the Federal Reserve will not cut its interest rates today, but the market is expecting the central bank to clear the way for a cut in the next FOMC meeting in July.

According to experts, the Fed will drop the “patient” world from its statement in an apparent reference for a cut in July.

The Federal Reserve will also downgrade its economic forecast and, at the same time, it will also reduce its interest rate forecast.

Will the CME FedWatch Tool is showing a 75.8% of probabilities that the Fed will keep unchanged its interest rates at 2.25-2.50% today, it also indicates that 25-basis-points cut in July is 63.7% possible.

A hint that the Fed will cut rates on July will hurt the dollar. Therefore, it will push gold to highs above current levels.

Trump announces a Meeting with China’s Xi at the G20

The United States president Donald Trump has tweeted that he will meet with China president Xi Jinping next week during the G-20 in Japan. He also said that US and China teams would begin talks before that.

As the tweet says, “had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan,” US president wrote. “Our respective teams will begin talks prior to our meeting.”

A perspective of a trade war resolution is fueling sentiment and equities are trading up. It also contains movements across markets as a temperate catalyst ahead of the Fed.