Gold price weaker on corrective pullback ahead of FOMC conclusion

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(Kitco News) – Gold and silver prices are a bit lower in early US trading Wednesday, on downside corrections ahead of a US interest rate increase from the Federal Reserve this afternoon. February gold was last down $6.00 at $1,819.60 and March silver was down $0.04 at $23.95.

Most stock and financial markets are pausing as major central bank meetings are taking place this week. The Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning ends Wednesday afternoon with a statement, fresh economic projections and a press conference from Fed Chair Jerome Powell. The FOMC is likely to raise US interest rates by 0.5%. The European Central Bank and the Bank of England meet on Thursday and are likely to follow the US Federal Reserve with half-point rate hikes.

Global stock markets were mixed overnight, with European shares mostly lower and Asian shares mostly higher. US stock indexes are pointed toward slightly lower openings when the New York day session begins.

The key outside markets today see the US dollar index weaker. Prices Tuesday hit a 5.5-month low following a slightly cooler than expected US consumer price index report. Nymex crude oil prices are firm and trading around $76.00 a barrel. A major oil pipeline in the US has been shut due to a leak, and that’s supporting Nymex crude oil prices this week. Meanwhile, the yield on the benchmark US 10-year Treasury note is currently 3.5%.

Other US economic data due for release Wednesday includes the weekly MBA mortgage applications survey, import and export prices and the weekly DOE liquid energy stocks report.

Technically, the gold futures bulls have the firm overall near-term technical advantage. Prices are in a five-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 $1,900.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,775.00. First resistance is seen at $1,825.00 and then at this week’s high of $1,836.90. First support is seen at $1,800.00 and then at this week’s low of $1,789.00. Wyckoff’s Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

The silver bulls have the firm overall near-term technical advantage. A choppy, three-month-old uptrend is in place on the daily bar chart. Silver bulls’ next upside price objective is closing March futures prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at today’s high of $24.09 and then at this week’s high of $24.39. Next support is seen at Tuesday’s low of $23.49 and then at $23.00. Wyckoff’s Market Rating: 7.0.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/or damages arising from the use of this publication.


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