Momentary calm in metals
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Featuring views and opinions written by market professionals, not staff journalists.
The monetary metals continue to trade sideways this morning; gold will likely continue to oscillate between $1915-$1925 until today's 2 p.m. EST FOMC meeting. Although metals may bounce from short-term oversold conditions, traders would likely do well to be suspicious of knee-jerk moves.
Furthermore, although a bounce in metals may be sustained for a few days while oversold conditions are worked off, the risk is that metals put in a lower high compared to last week. Such an occurrence may signal that the metals complex is in for a longer, drawn-out consolidation in what may develop as an "ABC" technical pattern. Should gold fail to hold recent support today, the door to $1890 swings wide open.
Volatility in the stock market, however, remains intact. Index futures are pointing to a greater than 1% open today on the tail of yesterday's intraday rally and a spectacular overnight red-to-green reversal in Asian markets; the Chinese government has pledged to protect the functioning of its markets at all costs.
Brace for volatility as of 2 p.m. EST sharp. With the 25bp rate hike priced in, the focus will be on Chairman Powell's comments on future policy.