Fundamental News and Triggers
Precious Metals extend losses on the Fed’s cautious tone
- Gold and silver prices continued to decline as a result of the dollar’s rise, after the U.S. Federal Reserve dropped interest rates by 25 bps, as anticipated, and signalled two more cuts this year as the job market deteriorated.
- Chair Jerome Powell, meanwhile, expressed caution about additional easing, characterising the action as a risk-management strategy in reaction to a deteriorating labour market. The central bank will evaluate the future trajectory of interest rates “meeting-by-meeting,” he continued.
- Due to persistent geopolitical concerns, Fed easing expectations, and robust central bank demand, gold has increased 40% so far this year.
- The Bank of England and the Bank of Japan are anticipated to maintain policy stability this week, while the Bank of Canada also reduced its policy rate by 25 basis points.
Technical Triggers
- Gold Oct Futures seems to have topped out, and if it sustains below $3700 (~Rs 109,500), then we could only see further profit booking up to $3650(~Rs 108,000) and $3600 (~Rs 106,500).
- Silver Nov Futures also seems to have topped out around $43, the next target is $41(~Rs 123,500). Sell on rallies.
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