Gold started the day in the red before going green into the afternoon. The FOMC is meeting later this week and forecasts are for them to raise rates by a quarter point. Any divergence from that forecast would see volatility for gold. With the strong economic releases last week, the realistic, but still unlikely, scenario that would diverge from expectations would be for rates to be raised by a half percent. With a bearish sentiment on rate expectations priced in already, movement will likely be negligible before the FOMC meeting, but may follow the tendency to trail downwards prior to the meeting, with a small bounce if the rates come in at expectations. Expect the yellow metal to fall further if rates are raised by more than a quarter percent.
The other metals are mixed at settlement with Copper and Palladium the only metals seeing losses. May silver futures settled up to $16.325 a troy ounce, April platinum futures rose to $954.40 a troy ounce, May copper futures settled down to $3.0820 per pound, and June Palladium futures dropped to $987.40 a troy ounce.
For April gold, we see near term resistance at $1,319.00 with longer term resistance at $1,320.20. With near term support at $1,312.00, and showing longer term support at $1,306.20.
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Michael Bullion, CAIA
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RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.