Gold’s Price Action Ahead of FOMC Meeting

Gold’s Price Action Ahead of FOMC Meeting

#gold #FOMC #price

$XAU $GLD $USD

The gold futures contract gained 0.66% Monday, as it continued to fluctuate following the recent advance.

Recently gold was retracing a rally from around 1,800 to 7 August record high of 2,089.20 in reaction to USD advance, among other factors.

Then gold has bounced off the support level marked by mid-August local low of around 1,875, as we can see on the daily chart, the chart includes Tuesday’s intraday data:

Gold is still trading within a short-term consolidation. Tuesday, gold futures settled 11.30 lower (-0.6%) to 1,908.80oz off its multi-week highs, as a softer USD and split equity market applied some pressure.

Yesterday’s ISM Non-Manufacturing PMI release has been slightly better than expected at 57.8. Today we will get some more Fed/ECB talk. There will be the Fed Chairman Powell speech at 10:40a

Looking at last Friday’s Nonfarm Payrolls (NFPs) release. 

The Big Q: Where will the price of gold go after last week’s news? 

The Big A: Here the data since September 2018, a 25-month-long frame that contains of 25 NFP releases.

The 1st chart shows price paths 5 days before and 10 days after the NFP release. The last 3 cases are marked with dashed lines. Gold gained around 1% in July and September, but in August it lost almost 4%.

The following chart shows the average gold price path before and after the NFP releases for the past 25 months. The market was usually fluctuating for a week before advancing and closing 0.46% higher on the 10th day after the monthly NFPs release.

Below is economic news for Wednesday, as follows:

Wednesday, 7 October

  • 8:10a Eurozone – ECB President Lagarde Speech
  • 1:00p US – FOMC Member Kashkari Speech
  • 2:00p US – FOMC Meeting Minutes, FOMC Member Williams Speech
  • 3:00p US – FOMC Member Williams Speech
  • 9:45p China – Caixin Services PMI

Do you know Section 408(m)(3)? 

Well, it is a cousin of Section 401(k) of IRS code that unlocks investments you simply cannot find on Wall Street.

Section 408(m)(3) lets you open a Precious Metals “Self Directed” IRA and put real gold and silver into a tax-advantaged account.

Here are 3 good reasons to consider this IRS Tax Law as follows:

  1. Gold protects against downturns in the stock market
  2. Unlike the USD, gold maintains its purchasing power over time.
  3. No matter what happens to the world’s paper money, gold can be used as currency around the world.

Have a healthy day, Keep the Faith!

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Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he it the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.