Precious Metals Mostly Higher Ahead of the FOMC

The gold futures contract gained 0.13% on Tuesday, as it fluctuated following Monday’s advance. The market retraced most of the decline from September 1 local high of $2,001.20. Yesterday it has reached new short-term local high of $1,982.40 before coming back to the opening price. Gold is still trading within a consolidation along $1,950-2,000, as we can see on the daily chart:

Gold is 0.6% higher this morning, as it is trading along yesterday’s daily high. What about the other precious metals? Silver gained 0.40% on Tuesday and today it is 0.7% higher. Platinum gained 2.45% and today it is 0.2% higher. Palladium gained 3.88% yesterday and today it’s 0.7% lower. So precious metals are slightly higher ahead of today’s FOMC announcement.

Yesterday’s Empire State Manufacturing Index release has been better than expected and the Industrial Production number has been worse than expected at only +0.4%.

Today we will get the important FOMC Statement release. But we’ll also get the Retail Sales number at 8:30 a.m. and Business Inventories release at 10:00 a.m.

Where would the price of gold go following today’s Fed news release? We’ve compiled the data since January of 2017, a 43-month-long period of time that contains of thirty FOMC releases. The first chart shows price paths 5 days before and 10 days after the FOMC release. We can see that the biggest 10-day advance after the NFP day was +10.5% after March 15, 2020 release and the biggest decline was -7.2% after March 3, 2020 release. However, we’ve had an increased volatility following coronavirus fear then.

The following chart shows average gold price path before and after the FOMC releases for the past 43 months and 30 releases. The market was usually declining ahead of the FOMC day. Then it was going up for a week-long period. We can see that on average, gold price was 0.8% higher 10 days after the FOMC Statement announcement.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days:

Wednesday, September 16

  • 8:30 a.m. U.S. – Retail Sales m/m, Core Retail Sales m/m
  • 10:00 a.m. U.S. – Business Inventories m/m, NAHB Housing Market Index
  • 2:00 a.m. U.S. – FOMC Statement, FOMC Economic Projections, Federal Funds Rate
  • 2:30 p.m. U.S. – FOMC Press Conference
  • Tentative, Japan – Monetary Policy Statement, BOJ Policy Rate

Thursday, September 17

  • 8:30 a.m. U.S. – Philly Fed Manufacturing Index, Unemployment Claims, Building Permits, Housing Starts

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For a look at all of today’s economic events, check out our economic calendar.

Paul Rejczak
Stock Selection Strategist
Sunshine Profits: Analysis. Care. Profits.

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Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

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