Gold, Silver Weaker; FOMC Conclusion Awaited

(Kitco News) – Gold and silver prices are modestly lower in early U.S. trading Thursday. A rebound in the U.S. dollar index today, following selling pressure this week, is working against the precious metals market bulls. December gold futures were last down $2.50 an ounce at $1,226.30. December Comex silver was last down $0.044 at $14.525 an ounce.

Focus today is on the conclusion of the Federal Reserve’s Open Market Committee (FOMC) meeting that began Wednesday morning and ends with a statement Thursday afternoon. No change in U.S. interest rates is expected. As always, traders will scrutinize wording of the FOMC statement and Chairman Jay Powell’s remarks at his press conference, for clues on the future direction and timing of U.S. monetary policy.

European stock markets were mixed overnight, while Asian shares were mostly firmer. U.S. stock indexes are pointed toward lower openings when the New York day session begins, on a corrective pullback from Wednesday’s solid gains.

Risk appetite in the world marketplace is mostly upbeat following the U.S. mid-term elections that produced a divided Congress.

In overnight news, upbeat economic data out of China defied expectations that its trade war with the U.S. is crimping its economy. China’s exports in October rose by 15.6%, year-on-year. That handily beat expectations of an 11% increase. Imports in October were up 21.4%, year-on-year. Imports from the U.S. dropped 1.8%. This data suggests China could be in no hurry to settle its trade dispute with the U.S. However, as has been the case for years, some do question the veracity of China’s economic numbers.

Meantime, economic data out of the European Union showed the Euro zone’s 2018 economic growth is seen at 2.1%, with 2019 GDP seen at 1.9% and then at 1.7% in 2020. The report estimates 2018 and 2019 inflation for the Euro zone at an annual rate of 1.8%.

The other key “outside market” today finds Nymex crude oil prices slightly higher and trading just below $62.00 a barrel. Nymex oil prices this week hit a seven-month low. The down-trending crude oil market is a bearish element for the raw commodity sector, including the metals markets.

Other U.S. economic data due for release Thursday includes the weekly jobless claims report and the monthly chain store sales index.

Technically, gold bulls and bears are on a level overall near-term technical playing field. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at the October high of $1,246.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00. First resistance is seen at last week’s high of $1,239.30 and then at $1,246.00. First support is seen at the overnight low of $1,222.20 and then at last week’s low of $1,213.40. Wyckoff’s Market Rating: 5.0

December silver futures bears have the overall near-term technical advantage. However, recent price action suggests a market bottom is in place. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $15.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the September low of $13.965. First resistance is seen at this week’s high of $14.775 and then at the October high of $14.95. Next support is seen at the overnight low of $14.43 and then at last week’s low of $14.24. Wyckoff’s Market Rating: 3.0.

By Jim Wyckoff
For Kitco News


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