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Momentary calm in metals

Commentaries & Views

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.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.