Below is quote and Outlook on Gold By Mr. Abhishek Bansal, Founder Chairman, Abans Group.
After the Fed stated that tapering is not urgent, gold is expected to remain solid -
Following the Fed meeting announcements, gold is trading near $1815, up significantly from its previous close. The Federal Reserve of the United States has indicated that it is not in a hurry to reduce stimulus. Despite lingering concerns about Covid-19, the Federal Reserve decided to keep rates unchanged and stated that the US economy is recovering. Chair Jerome Powell stated that the US economy is still far from making "substantial further progress" toward price stability and maximum employment. The Federal Reserve is currently purchasing $120 billion in assets per month, including $80 billion in Treasury securities and $40 billion in mortgage-backed securities.
On the economic data front, the German Jun import price index rose +12.9% y/y, stronger than expectations of +12.6% y/y and the biggest increase in 39-1/2 years. Gains in EUR/USD were limited after the German Aug GfK consumer confidence was unchanged at -0.3, weaker than expectations of an increase to 1.0.
Gold prices also found support from the proliferation of the delta Covid variant around the globe which has prompted fresh lockdowns in Asia and Australia. It has raised fears of a global economic slump which has increased safe-haven demand for precious metals.
On Wednesday, Tokyo reported almost 3,000 new Covid infections, Thailand reported 16,533 new infections and South Korea reported 1,896 new Covid infections, all of which were new records. In addition, the seven-day average of new Covid infections in the United States reached a three-month high of 61,298 on Tuesday. According to Johns Hopkins University in the United States, the pandemic has claimed more than 4.18 million lives in 192 countries and territories, with over 195.63 million cases documented since December 2019.
According to the CFTC Commitments of Traders report for the week ending July 20, the net long position in crude oil futures climbed by 5136 contracts to 195972 contracts. The speculative long position climbed by 1769 contracts, while the speculative short position decreased by 3367 contracts.
Gold prices are expected to remain solid while trading above a major support level of $1790-$1772, while modest resistance might be found near $1827-$1842.
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