Gold, Silver Recover Initial Drops, Post Gains on the Day after PCE data

Metals such as gold and silver are trading positive on Tuesday after recovering from initial losses. Investors are focusing on the two-day meeting in the Federal Reserve and economic data in the United States.

Metal traders are expecting a 25 bp cut by the FOMC, but what is now more interesting is any hint the Fed would be willing to give signaling more cuts in the second half of 2019.

On the other hand, investors are also looking for Personal Outlines, including PCE price, income, and spending in the United States for June.

Core PCE Price Index rose 1.6% in June, below 1.7% expected by market but an acceleration from the revised down 1.5% posted in May. Personal Income rose 0.4% in line of expectations, and Spending increased by 0.3% in the same period.

Gold positive but it remains in a range

Gold recovered from initial losses, and it is now posting gains on the day. Market is focused on the two-day FOMC meeting starting today. A rate cut is already priced in the unit, but investors will be careful about possible new cuts hinted in the post-decision press conference.

Also, gold is affected by the US Dollar index, which unit jumped to fresh two-month highs at 98.20 earlier in the day, where it got a rejection that sent it back to 98.00; giving life to gold.

In this framework, XAU/USD is trading 0.10% positive on Tuesday with the unit moving at 1,430. It is the third positive day in a row as the unit is extending its recovery from July 25 lows at 1,410.

Technical conditions for XAU/USD remains weak, but some signals of recovery are starting to show up. If gold extends gains from current levels, it will find resistance at 1,400, 1,450, and finally 1,520.

To the downside, the 20-day moving average is containing the pair at 1,415. Below this level, check for supports at 1,410, 1,400 and 1,380.

Silver consolidates levels above 16.40

Silver is trading slightly positive on Tuesday as the unit is leaving behind the 16.30 support that was testing in the last week. XAG/USD is now moving 0.05% positive at 16.45. Mostly horizontal movements.

Technical studies are showing some overbought conditions that would make the metal hard to go up. However, the chart pattern is forming a bullish flag that the 16.60 area is containing.

“With that in mind,” FX Empire analyst Christopher Lewis affirms that he believes “that the $16.00 level underneath is massive support as well, so I’m looking for some type of pullback towards that area to get involved.”

“That would represent value to me, and I would be more than willing to jump in and take advantage of set ups that form in that level,” he stated.

To the downside, the first support is at 16.30, then 16.20 and finally the mentioned 16.00 area. To the upside, 16.50 is the first level, then 16.60 and 16.80 are the prices to watch.