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

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

XAUUSD daily chart July 30

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

XAGUSD daily chart July 30

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.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.