Gold and Silver Traders Focus upon Upcoming FOMC Meeting

　　Currently, the dollar index is trading at 90.38, up approximately 2/10 of a percent. Spot gold is currently fixed at $1854.30 and according to the KGX (Kitco gold index), the net decline of $1.20 is based upon fractional buying bidding gold prices higher by $2.30. However, dollar strength accounted for a $3.50 decline resulting in todays decline of $1.20.

　　Gold futures basis the most active February 2021 Comex contract is currently down $3.10 and fixed at $1853.10. February futures will soon reach first days notice with the April 2021 contract becoming the next most active contract month. Silver futures basis the most active March 2021 contract is currently down approximately $0.19 and fixed at $25.37.

　　The major focus of precious metals traders is upon the upcoming FOMC meeting which will begin tomorrow and conclude on Wednesday. As America and the world continue to battle the pandemic the Federal Reserve is not expected to announce any major changes. Fed members will focus upon both the current economic scenario which continues to be in an uncertain position, as well as the real possibility that the economic hardship will begin to dissipate as more vaccinations lead to an economic revival later on this year.

　　According to NASDAQ.com, the Federal Reserve is facing the current challenges of growing unemployment and some business sectors shutting down.

　　“Nearly a million people a week are filing first-time unemployment claims, with the unemployment rate stagnating at a high level and state governments keeping businesses shut to fight the spread of Covid-19. As one of his final acts in office, President Trump signed a $900 billion relief bill that offers more direct payments, more federal supplemental unemployment benefits and a second round of Paycheck Protection Program (PPP) loans to keep money flowing into the economy.”

　　Amidst this backdrop, it will be highly likely that the Federal Reserve maintains its stance of low-interest rates until 2023, and continue adding $120 billion monthly to its asset sheet. Although the GDP for 2020 has yet to be released currently the Federal Reserve is estimating that last years GDP will show a decline of 2.4%. However, the World Bank is predicting a net decline in GDP for the United States at 3.6%.

　　Concurrently many economists predict a tremendous economic comeback and a return to the pre-pandemic economic growth cycle later on this year. The short-term economic outlook versus the long-term outlook will determine the actions of the Federal Reserve, but until they see the unemployment rate decline they will be sensitive to not act too quickly which is why it is highly unlikely that the Fed will announce any major change to their current monetary policy. This could be highly supportive of gold and silver pricing as the current stance of the Federal Reserve will put renewed pressure on the dollar taking it lower.