Gold prices stalled below resistance Monday on a stronger dollar as bullion investors looked to this week’s Fed meeting and expected economic data to gauge how the market will perform in the near term.
Gold dipped below the $2,400 per ounce resistance level in midday trading, down $5.09 at $2,383 per ounce, after showing signs of struggle throughout last week. Silver, meanwhile, continued its slide from the previous week, trading down $0.40 at $27.70 per ounce.
Several conflicting factors contributed to the tighter trading, including a stronger dollar and overseas geopolitical tensions, including concerns that Lebanon may be drawn into the ongoing conflict in the Middle East. Additionally, a quarterly report from the China Gold Council showed that demand for bullion fell nearly 6% from the previous year as fears of an economic cooldown in that nation persisted. The People’s Bank of China stopped buying gold in May and June after notching 18 straight months of purchases.
The market hopes to find signs of future market stability with Wednesday’s Federal Open Market Committee meeting.
By then, policymakers will have had some time to digest reports released last week showing a surprise bump in economic activity in June and a 0.2% rise in the core PCE index last month – higher than projections of a 0.1% increase. The 12-month core inflation rate remained stuck at 2.6% for a second straight month, above forecasts of 2.5%. The Fed is expected to leave the benchmark interest rate of 5.25%-5.5% unchanged this week, but investors anticipate the easing will come by September.
Other key reports this week on consumer confidence, the jobs market, U.S. productivity, and manufacturing will help investors determine the health of the economy.
Gold Price Chart
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