· Gold tried but failed to extend its streak of gains, with prices settling slightly lower as the U.S. dollar strengthened a bit after last week’s sharp loss.
· “Gold is taking a breather after a big run up the last few days,” said Colin Cieszynski, chief market strategist at CMC Markets. Prices for the metal had logged gains in each of the last six sessions in a row.
“The U.S. Dollar is stabilizing as well and in the absence of major news,” Cieszynski said. Gold and the greenback “may both be going into a holding pattern ahead” ahead of a monetary policy statement from the U.S. Federal Open Market Committee due Wednesday.
· On Monday, August gold GCQ7, -0.08% fell 60 cents, or less than 0.1%, to settle at $1,254.30 an ounce after tapping an intraday high at $1,259. Its settlement of $1,254.90 on Friday was the highest since June 23, according to FactSet data. September silver SIU7, +0.04% shed 1.4 cents, or about 0.1%, to $16.443 an ounce, also reversing from modest gains earlier in the session.
· “Metals are not likely to rampage higher, unless a catalyst such as an equity meltdown or political event, possibly a more serious fact surrounding the Russian collusion probe, develop,” said Peter Hug, global trading director with Kitco Metals. “The trajectory should remain higher for gold, but likely a two-steps-up, one-step-back pattern. Gold’s next target is $1,268, with support at $1,250.”
· “The committee’s Wednesday communication is not expected to convey new policy directives but it may relay a shift in how current economic data fit into the Fed’s view of the world,” said Steven Blitz, chief U.S. economist and managing director of global macro investing, at TS Lombard, in a note.
· The Fed still seems unified on its plan to start selling off part of its $4.5 trillion portfolio in Treasurys and mortgage-backed bonds that it acquired over the past decade to help keep down U.S. interest rates. Investors are hoping this week to find out just exactly when the drawdown will begin.
Reference: Market Watch
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