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Gold down due to Fed anxiety, options expiry Monday - RBC Wealth Management

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Gold prices are going through an expected pullback due to the Federal Reserve rate decision and the options expiry on Monday, says RBC Wealth Management managing director George Gero. “Gold pullback expected prior to FED and due to options expiry last night on Comex. As expected open interest in gold options fell 200,000 contracts to 1,656,508 and some added to futures as in the money options became futures contracts today. Now at 658,982-small short covering, and silver 221,985, hardly moved but lost 34,000 silver options now 214916-usually more than futures.” The Fed is putting pressure on gold in the short-term due to worries that the central bank might pause rate cuts after announcing the third one of the year on Wednesday, writes Gero. “Look for metals pulling back ahead of FED as usual as one rate cut priced in now but anxiety over December and next year appears in pricing. Don’t count out gold as dollar index and rates firm, there are plenty of international investors waiting to buy gold at lower prices, look at Argentina, Chile, Middle East, Turkey US politics to name a few.”

By Anna Golubova of Kitco News;


Gold rally to resume, but expect lower gold levels in the short-term — TD Securities 

Tuesday October 29, 2019 08:40

Positive Brexit news and a likely hawkish sounding Federal Reserve are to keep prices at lower levels, say strategists at TD Securities. “Record highs and CTA buying in equity markets, along positive developments on the Brexit front have seen gold fall back toward $1,480/oz. Heading into the FOMC, where we expect the Fed to communicate patience, prices near recent lows would not be surprising in the short term, until weakness in the data and resumed rate cuts into 2020 support a further gold rally,” they write. A fall to $1,475 could open the door to $1,450 support, which could break even lower, add the strategists. 

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