Gold Treads Water Ahead Of Heavy Dose of “Fed-Speak”

(Kitco News) – Gold and silver prices are near steady levels in early U.S. trading Thursday. The safe-haven metals are seeing some support from a pullback in global equity markets today. The recent sell off in the U.S. dollar index is also a bullish element for the precious metals markets. February gold futures were last up $0.10 an ounce at $1,292.00. March Comex silver was down $0.015 at $15.72 an ounce.

The marketplace is awaiting Federal Reserve Chairman Jerome Powell’s speech to the Economic Club of Washington, D.C. at midday today. Several other Federal Reserve officials also are on tap for speeches today.

The Wednesday afternoon release of the minutes from the last meeting of the Federal Reserve’s Open Market Committee (FOMC) were deemed as favoring the dovish side of monetary policy, which supported the metals markets and helped to drop the U.S. dollar index to a 2.5-month low on Wednesday. Two Fed officials on Wednesday also suggested there may not be further interest rate cuts in 2019.

European and Asian stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. The global indexes are experiencing normal downside corrections today, following recent good gains.

The USDX is seeing a mild corrective bounce Thursday morning, but has been trending sideways to lower on the daily chart for the past month. Meantime, Nymex crude oil prices are weaker and trading just above $52.00 a barrel level. Technical evidence is building the oil market will trade at least sideways in the coming weeks, if not sideways to higher.

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

Technically, the gold bulls have the overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,300.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at $1,260.00. First resistance is seen at the overnight high of $1,298.00 and then at the January high of $1,300.40. First support is seen at this week’s low of $1,280.20 and then at the January low of $1,278.10. Wyckoff’s Market Rating: 6.5

March silver futures bulls have the overall near-term technical advantage. A seven-week-old uptrend is in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at this week’s high of $15.88 and then at last week’s high of $15.955. Next support is seen at this week’s low of $15.56 and then at $15.385. Wyckoff’s Market Rating: 6.0.

By Jim Wyckoff
For Kitco News


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