Another month comes to an end with precious metals pushing higher. It was a muted day as traders sit on the sidelines waiting for the outcomes of the FOMC and ECB meetings.
Spot gold pushed higher in European trade to $1629 but couldn't quite hold its gains dipping lower during North American trade to $1615
"Price movement have been fairly muted while investors mostly bide their time in anticipation of the results of the FOMC meeting"Standard Bank said
In U.S data, Chicago PMI surprised to the upside rising from 52.9 to 53.7 in July instead of dropping to 52.5. Also surprising was consumer confidence rising from 62.7 (revised from 62.0) to 65.9. Consensus was for a decline to 61.8. The S&P/Case-Shiller home price indices in the US increased 2.2 percent in May over the previous month. This news was well received as the U.S dollar rallied after trading lower yesterday. It was a risk off day as commodities suffered a setback with Crude oil leading the way trading $2.00 lower to $87.85.
Markets remain on hold until traders and investors can get a sense of what the FOMC is going to do, by the looks of the data flowing, the U.S economy is not in dire straits but it's still not recovering as quickly as it has in the past. The Feds run the risk of if they wait too long to act whatever they may do may not help the economy and that could slip the U.S back into a recession.
"No Federal Reserve Board wants to be seen or remembered as being even tangentially political, and any move to ease monetary policy at the moment will be seen as being at least marginally so" said Dennis Gartman in his daily letter
Spot silver jumped to its highest level since July 4th of $28.39, again with month end we saw some book squaring which took the metal lower breaking $28.00. The gold silver ratio traced back to 57.75, but looks poised to trade lower to 57.20. If that's the case, silver will outperform gold in the short term.