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Investors and traders alike are closely monitoring the rate at which the Fed is printing money and also what might be in store for interest rates. While they had hoped for a steady increase in jobs, what we are getting is high inflation many asset classes blowing out. All expect the two most obvious markets in Gold and Silver.

Looking at the two big levels, it is obvious for all to see. $1,900 in Gold and $28 in Silver. If these two levels can hold then the upside in both could be enormous.

If we ever get to the point where both metals can trade in a free open market, without the massive short positions from the banks, then who knows what the true price of each might be.

Nevertheless, we will watch closely for what Powell has to say and what the outlook could be. I remain incredibly bullish on both Gold and Silver and believe there is huge upside ahead.

· Silver eased 0.1% to $27.62 per ounce, palladium gained 0.1% to $2,765.96, while platinum fell 0.2% to $1,151.54.

· A full rundown of what to expect from the Federal Reserve on Wednesday

The Federal Reserve is not expected to take any policy actions after its two-day meeting this week, but it is likely to signal that it is thinking about them.

Some economists expect the Fed to mention a coming tapering of its bond-buying program and give preliminary guidance on the discussion but not fully commit to tapering yet. The Fed will also release new economic forecasts, which it does quarterly.

Taper talk

That discussion could begin this week, but only on a preliminary level, some economists say. The real details of the tapering of its $120 billion monthly purchases are expected to come later this year. Many economists expect the official discussion to be in late August, when the Fed meets in Jackson Hole, Wyoming, for its annual symposium. The Fed could then begin unwinding its bond buying at the end of this year or beginning of next, they say.

‘Start talking about talking about it’

Powell could choose to bring up the tapering during his post-meeting press briefing, and he surely will be asked about it.

Hot inflation

The Fed is expected to boost its inflation forecast for this year after hotter-than-expected readings this month and last month. The consumer price index for May was up 5%. Economists are focused on the 2023 forecast, since higher inflation in the future could prompt the Fed to change its interest rate forecast as well.

The Fed presents its inflation forecast on a “dot plot,” with anonymous entries for each Fed official. In March, the dot plot showed a split of 11 to 7 against a 2023 hike. JPMorgan economists expect several Fed officials to change their position and support a 2023 hike. They also changed their own rate forecast to a rate hike in 2023.

Bank of America strategists, however, do not expect officials to agree on a 2023 hike. “We think they’ll remain in the ‘on hold’ camp, but that will be one of the key focuses of the market,” said Cabana. “The market is pricing in 2, 2.5 hikes by the end of 2023. The Fed is currently not expecting any.”

Overnight rate

Fed watchers are also split on whether the central bank will make technical adjustments to some short term rates.

Cabana expects the Fed to raise the interest on excess reserves slightly because of building pressures in the short-term lending market.

· China’s retail sales miss expectations again

China said Wednesday that retail sales rose 12.4% in May, missing expectations despite government efforts to boost spending and a major holiday during the month.

Analysts had expected retail sales to rise 13.6% in May from a year ago.

Consumer spending has lagged China’s economic recovery from the coronavirus pandemic. In April, retail sales climbed a less-than-expected 17.7% from a year ago.

Industrial production rose 8.8% from a year ago in May, less than the 9% growth forecast by analysts.

· Another shipping crisis looms on Covid fears in southern China

Businesses and consumers are bracing for another shipping crisis, as a virus outbreak in southern China disrupts port services and delays deliveries, threatening to drive up costs again.

· China ramps up vaccinations, but uneven rollout leaves borders closed

China has tripled its daily COVID-19 vaccine rollout in June, inoculating 44% of its population with at least one dose, but its health experts warn against a quick border reopening, citing an uneven rollout and the low rate of full vaccinations.

· China’s new Covid hotspot reports zero new cases for the first time since latest outbreak

The southern Chinese city of Guangzhou reported zero new locally transmitted coronavirus cases for the first time since a new cluster of cases cropped up on May 21.

· UK inflation jumps past Bank of England target, hits 2.1%

British inflation unexpectedly jumped above the Bank of England's 2.0% target in May when it hit 2.1% and looks set to rise further as the country re-opens its economy after its coronavirus lockdowns.

The rise in price growth from April’s 1.5% was driven in large part by the comparison with prices in May 2020 when the country was in its first tight lockdown, especially for clothing, motor fuel, games and take-away food.

· Germany's Ifo institute cuts growth forecast due to supply bottlenecks

The German economy will grow by a weaker-than-expected 3.3% this year as supply bottlenecks in manufacturing hold back industrial output, the Ifo economic institute predicted on Wednesday.

The lower growth forecast for Europe’s largest economy represented a cut of 0.4 percentage points compared to its previous estimate from March, Ifo said.

For 2022, the institute raised its GDP growth forecast to 4.3% from 3.2% previously.

· Singapore finance minister says city-state could become a regional hub for green finance

Singapore plans to invest more in building a new green economy, according to the city-state’s Finance Minister Lawrence Wong.

· Air travel in Asia won’t return to pre-Covid levels ‘anytime soon,’ says Singapore minister

· Wide disagreements, low expectations as Biden, Putin meet

· Tensions high after Israeli airstrikes hit Hamas sites in Gaza

Israeli airstrikes hit Hamas targets in Gaza early Wednesday morning, with the military saying this was in response to incendiary balloons crossing over from Hamas-controlled territory into Israel.

Reference: Kitco, The Week, CNBC, Reuters, Money Control