Gold up Ahead the Fed, Trump Blames Europe for Doing What He Wants To Do in USGold is trading up as well as other metals just ahead of the Federal Reserve 2-day meeting. Trump tweeted again.
Gold is trading positive on Tuesday as investors are expecting a rate cut by the Fed on Wednesday. Also, they are digesting Trump last tweet blaming ECB Draghi’s stance on Euro.
The investing market is watching the FOMC 2-day meeting closely as the primary catalyst for movements. Equities are trading higher, dollar is up on the day, and the yellow metal is also posting gains.
The dollar index is extending gains for the fifth day in a row, but benefits are now limited as investors are focused on the FOMC 2-day meeting that starts today. Experts are waiting for hints to a rate cut.
A rate cut is on the table; so, speculations of a weak dollar is sending metals up.
Metals report for June 18, 2019
Gold is trading positive on Tuesday as the unit is extending its recovery from the 1,333 low reached on Monday. It is now pricing at 1,350, just ahead of its 2-month highs at 1,358 traded yesterday.
Silver is advancing on Tuesday after two negative sessions that drove the unit from 15.12 on June 14 to trade at 14.78 on Monday. The unit is now consolidating gains above the 200-day moving average at 14.90 and testing the 15.00 area.
Copper broke the 20-day moving average on Tuesday to perform its second day of gains in a row. The unit is extending recovery from Friday’s lows at 2.6110 to trade at current intraday highs at 2.6712.
After three days testing it, Palladium finally broke the 1,467 level on Tuesday with the unit jumping near to 2% to price as high as 1,490. Besides, the 20-day moving average has crossed above the 50-day MA with the 200 days moving average acting as long term support, giving a long term signal for more gains.
Palladium is now facing the 1,500 area as the next resistance, then, 1,570. Above there, all-time highs at 1,615 will be exposed. So, expect more to come.
Platinum found support at the 790.00 area on Tuesday, and the pair took it as the place to build a new leg for recovery, at least in the short term. The unit is now testing the 20-day moving average at 805.00. However, technical studies don’t give many hopes for an upside movement. Time will say.
is the rate cut imminent?
Everybody in the market is watching the FOMC meeting this week as they are using interest rates as a catalyst for the next movement. Investors are waiting to see how the Fed will be positioning this time and how dovish that stance will be.
The market is also looking for hints about rate cuts soon, and a cut on Wednesday is not out of the table.
In this framework, gold investors are taking positions and provide steam to the metal to gain ground on Tuesday.
Trump blames Europe
As the tweet says, “Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA.”
Trump also put the European Union at the same level as China in terms of trade and currency war. “They have been getting away with this for years, along with China and others,” Trump says.
Interestingly, Trump tweeted that message today Tuesday, the day that the Federal is starting its 2-day meeting, as it could be taken as an attempt of pressure to force the Fed to move towards a rate cut.
Anyway, the tweet helped gold to make more gains versus the dollar. However, the Fed has the last word.