Daily Gold Report

Sean LuskPrecious Metals

Gold prices held steady today, after hitting a one-month high on Monday, buoyed by political uncertainty in the United States, as investors await the Federal Reserve meeting for clues on monetary policy. August gold futures lost $2.20 to close at 1252.1. Silver traded slightly higher gaining just over 9 cents to close at 16.54 basis September futures. Some upbeat U.S. economic data released this morning, in the form of the July consumer confidence and the Richmond Fed business survey, lifted the U.S. dollar index from its daily low, which in turn put some downside price pressure on the gold market. Investors also braced for possible hints on when the next interest rate hike is coming, ahead of the Fed’s rate-setting two-day committee meet that began this morning. No changes in U.S. monetary policy are expected. However, the Fed could indicate the timing of reducing its big balance sheet of U.S. securities. The tone of the FOMC statement will also be important for markets. Just recently Federal Reserve Chair Janet Yellen has sounded a more dovish tone on U.S. monetary policy.

Technically gold filled an upside gap at the 1259.0 level on Monday morning and since then we have seen an approximate $10.00 pullback. A close over 1259 sets up 1264.5 and then 1274.2 as the next resistances for the remainder of this week. Support sits down at 1246, and below there at 1236.3. Watch the 50 and 100 day moving averages for at 1250.8 and 1251 respectively as a close under here could lead to a test of the aforementioned support levels. For September silver, support sits first at 16.29 and then 16.09. Resistance is up at 16.65 and then up at 16.85.