Both precious metals hit three-week lows in overnight trading. As the US and China move closer to a major trade deal, risk-off sentiment has returned to the market, pushing US stock indexes to new record highs.
Technical sales also increased as the price chart showed signs of serious damage, suggesting that a short-term peak may have formed. December gold futures fell $82.3 to $3,937.1 an ounce, while December silver futures fell $0.449 to $46.325 an ounce.
The global stock market last night had mixed movements, while US stock indexes were forecast to open steadily or increase slightly when the trading session in New York began. The S&P 500 and Nasdaq both set new peaks overnight.
The Federal Open Market Committee (FOMC) meeting began this morning and will end on Wednesday afternoon, with a statement and press conference by FED Chairman Jerome Powell.
Analysts expect the Fed to cut interest rates by another 0.25 percentage points for the second consecutive time to support the job market. However, the Fed is divided internally, with some concerned about too much cutting, while others want to ease further, amid the lack of economic data due to a partial US government shutdown.
According to Bloomberg, Amazon.com Inc. announced a cut of about 14,000 employees in a major restructuring. Beth Galetti - Senior Vice President in charge of Human Resources and Technology - said that the locations cut are mainly in the office block. This streamlining is the next step to help the company operate more effectively, reduce management levels and focus resources on areas that bring the greatest value to current and future customers.
Reuters quoted the source as saying the number could reach 30,000. Amazon - an online retailer and cloud computing service provider - currently has about 1.55 million employees globally (as of June 30) and will announce its Q3 business results next Thursday.
US President Donald Trump today visited Japan, emphasizing his alliances with the Asian country and praising new Prime Minister Sanae Takaichi for his plan to increase defense spending.
Mr. Trump and Ms. Takaichi have signed two cooperation documents on trade and strategic minerals, but the contents are still unclear. The two sides pledged to "work quickly and continuously" in the field of trade and "coordinate in licensing, finance and geological maps" in the field of minerals. US President Donald Trump and Chinese President Xi Jinping are expected to meet a summit in South Korea on Thursday.
US stock indexes hit a new peak, investors are optimistic that the increase will continue. Investors are betting that the S&P 500 will surpass the 7,000-point mark after the seasonal volatility period seems to have passed, Bloomberg quoted the source.
On Monday, the index hit a record of 6,875 points, thanks to expectations of trade agreements, the possibility of the Fed cutting interest rates and positive corporate profits.
With a favorable macro context, investors believe that there is still much room for increase. Capital flows from both individual and institutional investors continue to flow into the market, while technical analysis shows that the front resistance level is quite weak. Notably, this week is considered the best period for stocks in the past 75 years Bloomberg commented.
Technically, the next upside target for buyers is to close above the strong resistance zone at $4,100/ounce. On the contrary, the target for the sellers is to pull the price below the solid support level at 3,800 USD/ounce.
The nearest resistance zone was at $4,000/ounce, followed by an overnight peak of $4,034.20. The first support was at $3,900/ounce, followed by $3,850/ounce.
In other markets, the USD index decreased slightly. Crude oil prices fell, trading around 60.5 USD/barrel. The yield on the 10-year US Treasury note is currently at 3.97%.
The world gold market operates through two main pricing mechanisms: the spot market - where prices are quoted for spot transactions, and the futures market (futures) - where prices are determined for future deliveries.
Due to the year-end liquidity factor, December gold contracts are currently the most actively traded on the CME exchange.
