Gold’s ‘Bullish Setup’ Explained: Interview with Kitco News

The gold market exhibited muted action today as traders anxiously await the Federal Reserve's impending rate cut decision. With the conclusion of this week's Federal Open Market Committee (FOMC) meeting on the horizon, market participants have adopted a cautious stance, resulting in gold prices holding steady. The central question looming over the market is the magnitude of the anticipated rate cut, with opinions divided between expectations of a 50 or 25-basis point reduction in the Fed funds rate. 

For the first time, the CME's FedWatch tool has indicated a higher probability of a more substantial 50-basis point cut, adding an extra layer of intrigue to the unfolding economic drama. Despite the uncertainty surrounding the exact size of the reduction, there is a broad consensus among market observers that rates will indeed be lowered when the FOMC concludes its deliberations on Wednesday. 

This prevailing sentiment was clearly reflected in today's price action, or more accurately, the lack thereof. Gold futures closed virtually unchanged, experiencing a negligible gain of $3.00. The trend continued in overseas trading, with gold prices remaining essentially static compared to New York's closing price. This price stability serves as a testament to the wait-and-see approach adopted by gold traders in anticipation of the Fed's decision. 

Interestingly, the fact that gold is maintaining its position above the $2,600 mark can be interpreted as a victory for bullish investors. This resilience is particularly noteworthy given the absence of any significant pullback following last week's extraordinary price surge. During that period, gold experienced a remarkable $86 increase, propelling it above $2,600 for the first time in history. As of 7:00 PM ET, gold futures for the most active December contract (GCZ 2024) were trading at $2,610.50, further underscoring the market's current stability. 

The recent performance of gold has been nothing short of impressive, with the precious metal establishing new record weekly highs in seven of the last eleven weeks. This sustained upward trajectory raises intriguing questions about the potential for silver to mirror gold's ascent. Last week provided a compelling preview of this possibility, as silver futures gained nearly 10% in value, or $2.79, outpacing gold's percentage gain by approximately threefold. 

This synchronicity between gold and silver prices is a familiar pattern in precious metals markets, often serving as a barometer for broader economic sentiment. While silver currently trades well below its all-time high of around $50, the recent price action suggests it may be poised to continue outpacing gold's gains. This potential for accelerated growth in silver prices hinges on the persistence of current market conditions and the Federal Reserve meeting investor expectations. 

As the financial world collectively holds its breath in anticipation of the FOMC's decision, the precious metals market stands at a critical juncture. The outcome of Wednesday's meeting has the potential to trigger significant price movements, not only in gold and silver but across a wide spectrum of financial assets. Traders and investors alike will be watching closely, ready to adjust their strategies based on the Fed's actions and the subsequent market reaction. 

Today’s show will include an interview recorded this morning with Jeremy Szafron, Anchor at Kitco News. 

Kitco News Interview: Jeremy Szafron, Anchor at Kitco News, interviewed Gary Wagner, Editor of thegoldforecast.com, as gold reached all-time highs near $2,600. Wagner provided in-depth technical analysis, highlighting how gold’s bullish momentum was confirmed by its positioning above key moving averages—50-day, 100-day, and 200-day—signaling potential for further gains. The interview covered the Federal Reserve's rate cut decision, which could drive gold even higher, with Wagner projecting gold could reach $2,625 to $2,650. Wagner also discussed key support and resistance levels, along with silver's underperformance compared to gold. 

00:00 - Introduction & Gold Hits All-Time High 

01:25 - Gold’s Historic Move: $2,600 and Beyond 

03:45 - Impact of the Federal Reserve’s Rate Decision 

05:20 - Technical Indicators: Moving Averages and Gold’s Trend 

07:35 - Short-Term Projections for Gold 

09:15 - Fed Rate Cut Expectations and Gold Sensitivity 

11:40 - Key Support and Resistance Levels for Gold 

13:50 - RSI: Is Gold Overbought? 

15:40 - Silver’s Lag Behind Gold 

17:55 - Final Thoughts & Gold’s Future Outlook

Wishing you as always, good trading,