Jim Wyckoff - Daily Gold Market Updates

Gold and silver prices are firmer in early U.S. trading Monday, with some buying support seen from a big drop in crude oil prices overnight that have somewhat and at least temporarily eased inflation concerns just ahead of this week’s FOMC meeting. Gold and silver bulls are hoping the easing inflation worries could prompt the Fed to lean less hawkish on its monetary policy. A weaker U.S. dollar index and a dip in bond yields to start the trading week are also working in favor of the precious metals market bulls. August gold was last up $34.90 at $4,106.00. September silver prices were last up $0.604 at $59.51.

U.S., Iran pause hostilities; crude oil prices drop. The U.S. and Iran held off attacks on each other for a third straight night, helping lift global stock and bond markets and push down oil prices. President Trump, who last week threatened to step up attacks in Iran, is giving diplomacy “some space,” Mike Waltz, Washington’s ambassador to the United Nations, said on Sunday and as reported by Bloomberg. The New York Times reported Trump and his advisers decided to hold off on plans to escalate U.S. strikes, partly because of concerns about diminishing stockpiles of air defenses such as Patriot interceptors. Waltz, speaking to NBC, said American forces had all the weaponry they needed. Trump has consistently said “he prefers a diplomatic solution, but he continues to retain all options if Iran continues terrorist activities in the Strait of Hormuz or against allies,” a White House spokesman said in a statement. Still, tensions between the warring sides remain high and Iran has said there’s no change to the status of the Strait of Hormuz, meaning it’s likely to continue targeting commercial ships that don’t receive its permission before transiting. Traffic through the vital waterway — through which one fifth of the world’s oil and liquefied natural gas supplies flowed before the conflict — remains negligible.

Fed’s FOMC meeting this week. The Federal Reserve’s Open Market Committee (FOMC) meeting begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chair Kevin Warsh. Wednesday’s rate decision is approaching with more suspense than many anticipated after June consumer price data in the U.S. came in much cooler than expected. Still, many Fed watchers are expecting the FOMC to lean toward the hawkish side.

The key outside markets today see the U.S. dollar index lower. September Nymex WTI crude oil prices are sharply lower and trading around $83.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.63%.

Technically, August gold futures see a price downtrend on the daily bar chart that has stalled out. Bulls’ next upside price objective is to produce a close above solid resistance at the July high of $4,400.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $3,955.40. First resistance is seen at $4,150.00 and then at $4,171.40. First support is seen at $4,050.00 and then at $4,024.00. Wyckoff's Market Rating: 3.0

September silver futures also see a price downtrend on the daily bar chart stalling. The next upside price objective for the bulls is closing prices above solid technical resistance at $65.00. The next downside price objective for the bears is closing prices below solid support at $50.00. First resistance is seen at last week’s high of $61.27 and then at $63.73. Next support is seen at $57.32 and then at the July low of $55.00. Wyckoff's Market Rating: 2.5