We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The US Dollar may be at risk to losses against some of its #ASEAN counterparts. USD/SGD, USD/PHP, USD/MYR and USD/IDR have recently broken to the downside. Will losses continue? Find out from @ddubrovskyFX here: https://t.co/0RTlj6maTT https://t.co/UyQ4i0AihI
  • The British Pound technical outlook still seems to favor the downside. GBP/CAD may pressure key rising support from August as GBP/AUD could prolong its downtrend. GBP/CHF may fall. Get your $GBP market update from @ddubrovskyFX here: https://t.co/hBOpDKXmfW https://t.co/AJlT2YKeCu
  • USD/JPY is approaching medium-term uptrend resistance and while the outlook remains constructive, the advance may be vulnerable near-term while below confluence resistance. Get your $USDJPY technical analysis from @MBForex here: https://t.co/93D7AyhHtG https://t.co/KQcLLrkMP3
  • AUD/USD has had the most impressive show of trend over the past couple of months with the pair gaining almost 1500 pips from the March low. Get your $AUDUSD technical analysis from @JStanleyFX here: https://t.co/vLz4Rpln3u https://t.co/AOwnJja5V8
  • Has the #Euro been saved? Find out from @CVecchioFX here: https://t.co/eiXfOTyGa6 https://t.co/AyRiYpb4cN
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/ygwjGNvS61
  • The $USD, Euro, British Pound and Australian Dollar will all be at the mercy of political developments in Asia, Europe and North America this week. An avalanche of PMI data will set the backdrop. Find out from @ZabelinDimitri here: https://t.co/L8cfAgVx94 https://t.co/THWhPAS6AM
  • The price of #gold plunged 1% immediately after the stunning US jobs report crossed the wires. Get your market update from @RichDvorakFX here: https://t.co/8i0L6YIqjy https://t.co/y9dIXazJf9
  • S&P 500, Dow Jones, Nasdaq explode higher with stocks surging in response to shockingly better-than-expected monthly jobs data. Get your #equities market update from @RichDvorakFX here: https://t.co/nuMVWOzzuC https://t.co/M3nGBjd7kZ
  • The record-breaking NFPs increase behind us and the FOMC rate decision on Wednesday sets the tone for my trading video: 'Dow Soars Above 200-Day Average on NFPs, Will the #Fed Keep the Dollar Sliding' https://www.dailyfx.com/forex/video/daily_news_report/2020/06/06/Dow-Soars-Above-200-Day-Average-on-NFPs-Will-the-Fed-Keep-the-Dollar-Sliding.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/kquvec5HVc
Commodities: Gold, Silver Wait on FOMC Outcome for Direction Cues

Commodities: Gold, Silver Wait on FOMC Outcome for Direction Cues

2012-12-11 12:35:00
Ilya Spivak, Head Strategist, APAC
Share:

Gold and silver are looking to the outcome of the FOMC rate decision for direction cues, with a neutral result threatening to weigh on prices and boost the Dollar.

Talking Points

  • Metals Tread Water as All Eyes Look Ahead to FOMC Rate Decision
  • Crude Oil Aims Higher as Risk Appetite First Before Wall Street Open

Commodities are yielding a mixed performance ahead of the opening bell on Wall Street. Cycle-sensitive crude oil prices are on the upswing along with an apparent pickup in risk appetite, with S&P 500 index futures pointing higher. Metals are treading water however as traders eschew firm directional bets ahead of the FOMC monetary policy announcement.

At the heart of the Fed’s decision will be the fate of the so-called Operation Twist program designed to re-target stimulus at lowering longer-term borrowing costs. This is done by swapping out short-term securities on the Fed’s balance sheet for long-dated ones at a pace of about $45 billion per month. Twist is due to expire at year-end and the market consensus appears to be that it will be replaced with an equivalent-sized program.

Crucially, the market appears positioned to see the Fed replaces Twist with an “unsterilized” bond-buying program, meaning that unlike its predecessor it will not be balance-sheet neutral. Such an outcome is likely to be treated as a meaningful move to the dovish side of the spectrum, weighing on the US Dollar and boosting metals on the back of inflation-hedge demand.

However, the positive tone of the latest Fed Beige Book as well as last week’s NFP print open the door for a less aggressive maneuver that would effectively keep the current setting of monetary policy unchanged. This outcome may disappoint investors, sparking risk aversion and boosting the greenback. Needless to say, the commodity space is likely to see broad-based weakness in such a scenario.

WTI Crude Oil (NY Close): $85.93 // -0.33 // -0.38%

Prices moved lower as expected after putting in a Shooting Star candlestick. A bearish continuation Flag chart pattern now appears to be validated with a break through the setup’s lower boundary, initially exposing the 38.2% Fibonacci expansion at 84.04. A further push below that targets the 50% level at 82.13. Flag bottom support-turned-resistance is now at 85.88, with a reversal back above that aiming for the 23.6% Fib at 86.45.

Commodities_Gold_Silver_Wait_on_FOMC_Outcome_for_Direction_Cues_body_Picture_4.png, Commodities: Gold, Silver Wait on FOMC Outcome for Direction Cues

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1704.05 // +4.15 // +0.24%

Prices broke lower after putting in a Bearish Engulfing candlestick pattern, taking out support at a rising trend line set from late June. Sellers are retesting this barrier as resistance (now at 1715.03), with a break back higher aiming to challenge 1752.55. Alternatively, bearish resumption targets the November 5 low at 1672.50.

Commodities_Gold_Silver_Wait_on_FOMC_Outcome_for_Direction_Cues_body_Picture_3.png, Commodities: Gold, Silver Wait on FOMC Outcome for Direction Cues

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video

Spot Silver (NY Close): $33.26 // +0.20 // +0.11%

Prices are testing the 23.6% Fibonacci expansion (33.28), with a break higher exposing the November 29 close at 34.24 and channel support-turned-resistance at the 34.63. Support is at 32.59, the 38.2% Fib. A drop below that aims for the 50% level at 32.03.

Commodities_Gold_Silver_Wait_on_FOMC_Outcome_for_Direction_Cues_body_Picture_2.png, Commodities: Gold, Silver Wait on FOMC Outcome for Direction Cues

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video

COMEX E-Mini Copper (NY Close): $3.706 // +0.042 // +1.15%

Prices broke above resistance at 3.676, the 50% Fibonacci expansion, exposing the 61.8% level at 3.742. A further push higher beyond that aims for the 76.4% Fib at 3.821. The 3.676 level has been recast as near-term support. A reversal back below that aims for trend line resistance-turned-support set from the September 14 swing high, now at 3.634.

Commodities_Gold_Silver_Wait_on_FOMC_Outcome_for_Direction_Cues_body_Picture_1.png, Commodities: Gold, Silver Wait on FOMC Outcome for Direction Cues

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

To be added to Ilya's e-mail distribution list, please CLICK HERE

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.