Precious metals lack conviction on the bid as US Dollar leans on less dovish FOMC minutes

  • Gold, Silver and the US Dollar showed little reaction to the release of the FOMC minutes.
  • FOMC Meeting’s Minutes failed to impress, reiterating Chief’s Powell well-know message.
  • Gold for December delivery was at $1,513 an ounce shortly after the meeting minutes.

Precious metals have been losing upside momentum of late as the US Dollar catches a bid for its safe-haven status and being the cleanest of dirty shirts while the Federal Reserve shows no sigs of a sense of urgency to drastically change its approach to what appears to be a deterioration of the global economy. 

At the time of writing, Gold prices are firmly placed above the $1500 psychological level, trading between $1499.96 and $1511.47 on the day, unfazed by ho-hum Federal Open Market Committee's Minutes which failed to incentivise markets in either direction. Spot Silver prices have had a similar reaction on the release, stuck around $17.78 having travelled between $17.67 and $17.958 and flat on the day so far. 

FOMC Meeting’s Minutes failed to impress

The FOMC's Minutes failed to impress, reiterating Chief’s Powell well-know message: risks come from abroad, chances of a recession are limited, the economy overall healthy. The US Dollar can probably take some refuge under the paragraph which states that "several policymakers favoured keeping rates steady, saying baseline economic projection had changed very little and that uncertainties would not derail the expansion."

Gold prices climbed on Wednesday to snap a three-session streak of declines, as traders eyed developments ahead of U.S.-China trade talks. Prices then extended those gains in electronic trading after minutes from the Federal Open Market Committee’s September meeting showed that Fed officials had grown more worried about the economy. In electronic trading, gold for December delivery was at $1,513 an ounce shortly after the meeting minutes. The contract had climbed by $8.90, or 0.6%, to settle at $1,512.80 an ounce on Comex, ahead of the news.

In electronic trading, gold for December delivery was at $1,513 an ounce shortly after the meeting minutes and had climbed by $8.90, or 0.6%, to settle at $1,512.80 an ounce on Comex, ahead of the release. The DXY was flat and holds in bullish territory while trading on the 99 handle and above the 21-day moving average. 

"With a high proportion of real rates in negative territory, purchasing gold as an alternative to bonds is particularly attractive given the paradigm shift narrative,"

analysts at TD Securities explained. 

Gold levels

Technically, bulls are committed to the1500 psychological level and the next upside target will be 1520 ahead of a 1535 resistance level. Bears can target a break to below a 50% mean reversion of the late June swing lows to recent highs around 1460/70.

Silver levels

Technically, the price is showing little conviction while resting on the 21-day moving average without follow through to the upside, meeting offers just ahead of the 18 handle. Bulls will need to overcome a triple-top target of 18.60/80 before a run to the 19.60s and September highs. Below the 21 and 50-DMAs, the 61.8% down at 16.10 ahead of a run to the 200-day moving average down in the 15.90s will be compelling targets.  

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD: Bullish case underpinned by weekend news

The EUR/USD pair has rallied Friday to close with gains for a third consecutive week at 1.1169. There was no particular catalyst for EUR gains. ECB scheduled to meet this week, although no fireworks expected this time.


GBP/USD: Uncertainty or relief? Action granted anyway

Hopes that the UK will avoid a hard-Brexit kept the Pound rallying against all of its major rivals by the end of last week, with GBP/USD finishing it a handful of pips below the critical 1.3000 level.


USD/JPY: Corrective slide to continue on sentiment

The USD/JPY pair closed the week at around 108.40, down Friday for a third consecutive day as the American currency remained under selling pressure. USD/JPY at risk of falling further only if it breaks below 108.00.


Gold turns flat above $1,490 as USD remains under pressure

After dropping to a daily low of $1,485, the XAU/USD pair staged a modest rebound during the American trading hours and turned flat on the day near $1,492.

Gold News

China’s downward economic path offers no escape from its trade problems

There were no surprises in China’s GDP figures as the government portrays an economy slipping steadily lower giving little promise of improvement or support for the waning global expansion.

Read more