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Gold Eyes FOMC Meeting Minutes

By Abhishek BansalCommoditiesJul 07, 2021 05:07AM ET
www.investing.com/analysis/gold-eyes-fomc-meeting-minutes-200590156
Gold Eyes FOMC Meeting Minutes
By Abhishek Bansal   |  Jul 07, 2021 05:07AM ET
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Gold August future contract prices fell back after registering a high of $1815.7 yesterday; at time of writing, trading near $1804 today.

However, the recent drop in the US 10-year bond yield is likely to keep supporting gold prices. The US 10-year bond yield was trading near 1.356 today, which was the lowest level since March 2021 and sharply lower from the recent high of 1.776 registered on Mar. 30.
 
Strength in the US dollar index is likely to keep a cap on gold prices though. The dollar index was trading near 92.53 ahead of the release of the minutes from the June 15-16 FOMC meeting. A hawkish tone from the FOMC meeting minutes will likely put pressure on gold prices.

FOMC members at that meeting began discussions of QE tapering. Also, most FOMC members turned significantly more hawkish about rate hikes. Seven of the 18 FOMC members are now expecting at least one +25 bp rate hike in 2022, and 11 of the 18 members are expecting at least two rate hikes by the end of 2023.
 
On the economic data front, the June US ISM services index fell by -3.9 points to 60.1, which was much weaker than expectations of a -0.5 point decline to 63.5.

Eurozone businesses expanded activity at the fastest rate in 15 years in June. IHS Markit's final composite Purchasing Managers' Index (PMI), seen as a good gauge of economic health, jumped to 59.5 last month from May's 57.1, its highest level since June 2006.
 
According to the CFTC Commitments of Traders report for the week ended June 29 net long for gold futures slipped by 3988 contracts to 162226 for the week. Speculative long positions increased by 1053 contracts, while shorts increased by 5041 contracts. 
 
Gold prices are likely to find support near $1780-$1767, while it is likely to face stiff resistance near $1811-$1829.

Gold Eyes FOMC Meeting Minutes
 

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Gold Eyes FOMC Meeting Minutes

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