Gold Weaker As U.S. Dollar Rebounds; FOMC On Deck

(Kitco News) – Gold prices are modestly lower in early U.S. trading Wednesday and are seeing pressure from a rebound in the U.S. dollar index today. Many markets are subdued this morning, ahead of this afternoon’s U.S. conclusions of the Federal Reserve’s Open Market Committee (FOMC) meeting. December gold futures were last down $3.10 an ounce at $1,202.00. December Comex silver was last down $0.013 at $14.48 an ounce.

World stock markets were mixed to mostly firmer overnight. U.S. stock indexes are also pointed toward firmer openings when the New York day session begins.

Traders and investors are awaiting the conclusion of the two-day FOMC meeting that began Tuesday morning and ends Wednesday afternoon with a statement. The FOMC is widely expected to slightly raise U.S. interest rates at this meeting, marking the third rate rise this year. Fed Chairman Jerome Powell will also hold a press conference after the meeting. As usual, the marketplace will parse the Fed’s and Powell’s wording for clues on the pace of future Fed rate hikes and the Fed’s inflation expectations.

Focus in Europe is now on the new Italian government’s economic plans to address its fiscal and financial problems, which are required by European Union law. Many believe Italian lawmakers won’t comply with EU rules on the matter.

The key outside markets today find the U.S. dollar index slightly higher on an upside correction from recent selling pressure. Meantime, November Nymex crude oil prices slightly lower and trading just above $72.00 a barrel. Supply worries have boosted oil recently. U.S. sanctions against Iran begin in early November, which will likely take much of that country’s oil off the world market. President Trump has singled out Iran in front of the United Nations this week as being a terrorist state that needs heavy economic sanctions. Trump also called out the OPEC oil cartel for holding prices artificially high, saying OPEC countries may not get financial or military support from the U.S.

Other U.S. economic data due for release today includes the weekly MBA mortgage applications survey, new residential sales and the weekly DOE liquid energy stocks report.

Technically, gold bears have the overall near-term technical advantage. However, recent sideways price action favors the bulls and suggests a market bottom is in place. Gold bulls’ next upside near-term price breakout objective is to produce a close in December futures above solid resistance at $1,220.70. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the August low of $1,167.10. First resistance is seen at this week’s high of $1,208.80 and then at 1,215.80. First support is seen at $1,200.00 and then at $1,196.00. Wyckoff’s Market Rating: 3.0

December silver futures bears have the overall near-term technical advantage, but recent price action also 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 $13.50. First resistance is seen at this week’s high of $14.595 and then at $14.75. Next support is seen at this week’s low of $14.22 and then at last week’s low of $14.065. Wyckoff’s Market Rating: 3.0.

By Jim Wyckoff
For Kitco News


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