Precious Metal vulnerable to short-covering after FED meeting

Gold and Silver – Kya Lagta Hai
Short-term View (up to 1 week) – Positive – – Gold is trading at important support of $1670, if prices sustain below these levels, it can fall towards $1620. Long-term View (3-4months) – Positive –Any dips towards 49000 and 52000 should be used as buying opportunities for the target of 52000 and 60000 for Gold and Silver respectively in longterm.
SPOT Prices
SPOT Gold Daily Price Chart
SPOT Silver Daily Price Chart
Important News and Triggers
  • International News – The precious metals complex saw an unusual crosswind in flows as silver saw a $1.6B bullish flow against a $2.0B bearish flow for gold. This constitutes the fifth week of bearish flows for gold. As such, gold is extremely vulnerable to short covering as the current short positions are above the 90th percentile over the past two years.
  • Economic Data – FED will be raising rates in today’s meeting and it would be the third 75 bp hike in a row and take Fed funds to the highest since 2008. More interesting will be the dot plot showing where the FOMC members see rates by year-end, likely 4%, and next year, likely 4.5%. What about inflation and GDP growth.
  • Currency Markets – Dollar Index trades higher today ahead of the FOMC meeting while Euro has dipped a bit. While the index rises towards 111 or higher, Euro can test 0.99/98/97 on the downside
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