Fed minutes reaffirms Powell’s testimony which supports higher gold price | The Gold Forecast

Fed minutes reaffirms Powell’s testimony which supports higher gold price

May 20, 2020 - 6:35pm

 by Gary Wagner

The hard truth remains, economic stimulus continues to be needed as both the Federal Reserve through their monetary policy, and the U.S. Treasury through fiscal policies has ballooned, and more stimulus will likely will be needed.

Today the minutes from the April FOMC meeting were released. They indicated that Federal Reserve members discussed being more transparent in regards to their future direction of interest rates. The Fed minutes coupled with yesterday’s testimony by Chairman Powell and Secretary of the Treasury Stephen Mnuchin continue to be highly supportive of gold prices.

The testimony along with the report by the Congressional Oversight Commission underscored the vast amount of monetary expenditures in response to the pandemic that has rocked the world on two fronts.

First is the effect on millions of individuals who have contracted the disease. According to BBC News the total number of cases of the Covid-19 virus currently stands at 4,891,785, and the death toll is currently at 324,496. The United States has reported that the total number of infected individuals now stands at 1,529,123, of which 91,992 souls lost their lives in the United States due to the pandemic.

The second effect is the economic repercussions because of the pandemic. At the onset of the pandemic it was reported more than 90% of the United States population was under mandatory lockdown. However, across the country, on a state-by-state basis, many states are now relaxing their stay-at-home orders, and our allowing certain businesses on a limited basis to begin to reopen.

Whether or not the move to relax the stay-at-home order or the reopening of businesses will ignite a second wave of new cases in the pandemic is unknown. However regardless of when this pandemic concludes, the economic repercussions have caused the world to face the worst recession since the Great Depression of the 1930s.

According to the International Monetary Fund the global economy will contract by at least 3% this year. According to the IMF’s chief economist, Gita Gopinath, “the crisis could knock $9 trillion (£7.2 trillion) off global GDP over the next two years.”

In other words, even after the pandemic has run its course the economic implications will continue to affect economies globally for years to come.

Gold has now gained value for six of the last seven trading days. With the exception of Monday’s strong decline, gold prices have shown gains since May 11th, when gold was trading at approximately $1700 per ounce. As of 4:05 PM EST gold futures basis the most active June contract is currently trading up $5.50, and fixed at $1751.10. That is approximately a $50 gain since May 11th.

Wishing you as always good trading and good health,

Gary S. Wagner - Executive Producer

This report is now free and publicly available to everyone

Gold Forecast: Proper Action

On Thursday, May 14th we sent out a trade alert to BUY june 2020 Gold (entry price = $1743.20), and place your stop at 1715
If you trade XAUUSD you bought spot @ $1731 with a stop at $1708

Maintain long gold and stop


Our Last Trade:

Thursday  May 7th we set out a trade alert to Buy June gold @ the market ($1724.10. However I spoke to aggresive and conservative traders with different parameters. Today we were stopped put of our traderthe specifics.

Long long gold at $1724. Stopped out @ $ 1701for a loss of $2300 per comex contract

The trade before that:

On Thursday April 30  we were stopped out of our trade.

We went  long June gold @ $1728.20, our Stop was hit at  @ $1698 for a loss of $3020 per Comex contract

The trade before that:

We sent out a Trade alert on Monday April 20th to buy june gold @ $1614.

We were stopped out at $1680 for a loss of $35.00 or $3500 per Comex Contract

The trade before that:

We went long gold at $1602 with a stop a $1737 (we sent out a trade alert on Tuesday April 14th).

We went long at $1602 and out at $1737 for a profit of $$135 per ounce. Each comex contract returned a profit of $13,500.00

The trade before that:

On Monday, March 23rd we sent out a Trade alert to buy April gold at the market ($1570.10) and place your stop at $1501.We raised our stop to $1613, which was hit when the market hit a low of $1611.

In at $1571 - Out at $1613 for a profit of $4200 per Comex Contract

Gold Market Forecast

Today we saw the return of gold and U.S. equities trading in tandem to the upside. This tandem rise typically only occurs during times when the Federal Reserve is doing quantitative easing with an extremely accommodating monetary policy. When you add to Fed actions the monetary stimulus that has recently been enacted by the United States Treasury Department, we have a scenario in which we could see both gold and equities continue to run in tandem.

Today’s report will look at gold, silver and bitcoin futures. We will first focus in upon our trade that we are currently involved in and look at the resistance areas that gold must trade and close above. We will also detail support levels that must not be broken if gold is to continue to rise to higher pricing.

Market Overview

Economic Calendar