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Precious Metals Surge Amid Unchanged U.S. Monetary Policy and Geopolitical Tensions

EDITOR'S NOTES

Gold and silver prices saw significant increases following the Federal Reserve’s decision to maintain current interest rates. Gold rose by $32 to $2,442.40 per ounce, and silver increased by $0.47 to $28.82 per ounce. The Fed’s statement indicated moderated economic growth with persistent inflation, leading to expectations of future rate cuts, which typically benefit non-yielding assets like precious metals. Additionally, safe-haven buying was driven by geopolitical tensions after an Israeli airstrike killed a Hamas leader, heightening fears of broader conflict. Market dynamics were further influenced by a lower U.S. dollar index, rising crude oil prices, and Japan’s unexpected interest rate hike. Stay updated on the latest gold and silver price movements after the FOMC announcement. Find out how the decision impacts the market.

Eric Blair Aug 1, 24

Gold and silver prices are higher in early-afternoon U.S. trading Wednesday, just after the U.S. monetary policy decision announcement from the Federal Reserve’s Open Market Committee (FOMC) that left interest rates unchanged, as expected. Some safe-haven demand is seen at mid-week after an apparent Israeli air strike killed the leader of Hamas. December gold was last up $16.80 at $2,469.10. September silver was up $0.25 at $28.775.

The just-released FOMC statement said the U.S. economy has moderated but inflation remains “somewhat elevated.” The Fed said it wants to see annual inflation back toward 2% before cutting rates, of which there has been some progress. The marketplace read the FOMC statement as being about as expected, which leans a bit dovish, and now awaits Fed Chairman Powell’s press conference.

In other news, an air strike killed the leader of Hamas in Tehran, Iran. Israel is widely believed to have carried out the assassination. This news infuriated Iran and its proxy militant groups around the Middle East. The assassination threatens to cause a major flare-up in military action in the region, possibly including a direct confrontation between Israel and Iran. Gold and silver prices saw some safe-haven buying after the news.

U.S. stock indexes are solidly higher in afternoon trading and seeing good rebounds following last week’s sell offs.

The Bank of Japan Wednesday raised its main interest rate to 0.25% from zero. The BOJ also said it would reduce its government bond buying by half. The news rallied the yen against the U.S. dollar. The tighter monetary policy in Japan, combined with the likely upcoming U.S. interest rate cuts this year, has shifted global investment flows, including the so-called “carry” trades being unwound.

The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are solidly higher and trading around $78.00 a barrel. The benchmark 10-year U.S. Treasury note yield is presently around 4.15%.

Technically, December gold bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,537.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,350.00. First resistance is seen at today’s high of $2,474.30 and then at $2,481.10. First support is seen at the overnight low of $2,449.20 and then at $2,425.00. Wyckoff's Market Rating: 7.0.

September silver futures bears have the overall near-term technical advantage. Prices are trending down on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $30.00. The next downside price objective for the bears is closing prices below solid support at the May low of $26.55. First resistance is seen at today’s high of $29.02 and then at $29.50. Next support is seen at the overnight low of $28.39 and then at $28.00. Wyckoff's Market Rating: 4.0

This article originally appeared on Kitco News.