US Stocks Higher Again though Investors await a pullback while FED prepares the next hike

26 July, 2023

As at 10am, AEST.

Gold Spot Price $AU2898

Silver Spot Price $AU36.48

Platinum Spot Price $AU1442

US stocks are on a remarkable upward trajectory, with the Dow Jones experiencing its 12th consecutive session of daily gains. While investors celebrate, economists are cautious as the Federal Reserve (FED) prepares for a potential interest rate hike later this week.

Following previous rate hikes, investors might anticipate an initial drop in valuations immediately after the increase, followed by strong growth as the FED adopts a more dovish communication approach.

Recently, the US released two robust economic reports. Firstly, consumer confidence reached new heights, reflecting the US's successful battle against inflation and resulting in a surge in consumer happiness. The consumer confidence index rose to 117.0 from 110.1.

Additionally, the S&P Case-Shiller home price index displayed continued growth, with a month-on-month increase of 0.7% for May 2023. The housing market has enjoyed four consecutive months of gains based on this indicator.

Amidst the awaited news from the FED this week, precious metals like Gold and Silver are well-positioned to absorb the impact. Gold remains comfortably above its 200-day moving average (200MDA) and is currently not overbought, as indicated by the Relative Strength Index (RSI) at 56.90. On the other hand, Silver exhibits more volatility but maintains a favourable position above its 200MDA.

As investors await the FED's announcement, the future trajectory of US stocks and precious metals remains uncertain, with potential fluctuations driven by economic indicators and FED decisions.

Gold daily, with 200MDA

Silver daily, with 200MDA