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Uncertainty is mastering the scene across financial markets as central banks’ monetary policies are in the making to potentially push the economy worldwide into a recession as a side effect of the battle against hot inflation.
Gold prices are slightly lower and silver slightly higher in early US trading session on Monday. Gold is seeing a modest corrective pullback and some mild profit taking from the futures traders ahead of this week’s highly anticipated monetary policy meeting of the US Fed.
February gold was last down $3.00 at $1,926.40 and March silver was up $0.183 at $23.805. The US data point of the week is the FOMC meeting that begins Tuesday morning and ends Wednesday afternoon with awaited statement.
Most economists believe the Fed will raise the key interest rate by 0.25%, following the recent 0.5% rate hikes. Trading in stock and financial markets early this week may be more muted ahead of the FOMC statement and press conference by Fed Chai Jerome Powell Wednesday afternoon.
Global stock markets were mixed overnight. US stock indexes are pointed toward lower openings when the New York day session begins.
The US stock indexes are in price uptrends on the daily bar charts and the stock index bulls have the overall near-term technical advantage as S&P and Nasdaq indexes on Friday hit six-week highs and closed at technically bullish weekly high closes.
Will the Fed stop gold’s run? Gold price sees longest weekly winning streak since the summer of 2020. In overnight news, the Eurozone got some positive economic data as the European Commission’s economic sentiment indicator for January posted a reading of 99.9 versus 97.1 in December. The January gain marks the third straight monthly rise in the indicator.
The key outside markets today see the US dollar index a bit weaker. Nymex crude oil futures prices are slightly down and trading around $79.50 a barrel. Oil traders are awaiting an OPEC-plus cartel meeting this Wednesday. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.551%.
US economic data due for release Monday is light and includes the Texas Manufacturing outlook survey.
Technically, the gold futures bulls have the solid overall near-term technical advantage. Prices are in a three-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $2,000.00.
