The African Standard bank released its daily commodities analysis and report for September 16. The report discussed the current gold market fundamentals.
Larry Summers withdrawal from being the next fed Chairman caused the market to stay on edge ahead of the next Federal Market Open Committee (FOMC) meeting on Tuesday and Wednesday. Summers was one of the hawkish nominees to this position. Moreover, the agreement between the U.S. and Russia for a plan to destroy Syria’s chemical weapon arsenal increased the market participants’ uncertainty about the U.S. tapering its bond purchasing program, and weaken the safe-haven demand on the yellow metal. Gold ETF holdings declined again after a period of stability during the past few days.
Gold might rally overnight as Summers pulled out the Fed Chairman position and news of a weaker dollar. The U.S. military action in Syria is becoming less likely to occur, which switched back the focus to the FOMC meeting. The U.S. debt ceiling issue with the mid-October deadline is still rumbling and putting more weight on the next FOMC meetings.
Gold price technical support is at $1,308 while the technical resistance is at $1,331.