Gold Slightly Down As U.S.-N. Korea Summit Upbeat; FOMC On Deck
(Kitco News) - Gold prices are moderately lower and trading right around the psychologically important $1,300.00 level in early-afternoon U.S. trading Tuesday. Gold and silver markets did not react significantly to the concluded U.S.-North Korea summit earlier today. August Comex gold futures were last down $2.40 an ounce at $1,300.80. July Comex silver was last down $0.022 at $16.93 an ounce.
The world marketplace took in stride the apparent positive conclusion of the summit meeting on denuclearization between U.S. President Donald Trump and North Korean President Kim Jong Un. World stock markets were narrowly mixed after the meeting.
U.S. Treasuries and the world currency markets also showed muted reactions to the summit’s conclusion—probably because traders and investors realize there are going to be lots of twists and turns on the road to complete denuclearization of North Korea, but still reckon this is a good start.
On tap earlier today was the U.S. consumer price index (CPI) for May. CPI came in at up 0.2% from April and up 2.8%, year-on-year. Those numbers were in line with market expectations and had little impact on the markets.
Attention now turns to the Federal Reserve’s Open Market Committee (FOMC) meeting that began today and ends Wednesday afternoon with a statement. It is widely expected the FOMC will raise U.S. interest rates by 0.25% at this meeting. Fed Chair Jerome Powell will have a press conference following the meeting.
The European Central Bank also holds its monetary policy meeting on Thursday. No change is expected in ECB policy, but the central bank is still on a path of easy money that is keeping its interest rates very low, and diverging with those of the U.S. By the end of the year the spread between key U.S. and Euro zone interest rates is expected to be around 3.0%.
Technically, gold price action has turned choppy and sideways recently. This has negated a price downtrend and suggests a near-term market bottom is in place. The gold bulls and bears are on a level overall near-term technical playing field. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the May high of $1,332.40. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the May low of $1,286.80. First resistance is seen at last week’s high of $1,307.80 and then at the June high of $1,312.60. First support is seen at the June low of $1,293.10 and then at $1,286.80. Wyckoff's Market Rating: 5.0
Silver hit another six-week high today. The silver bulls have the overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the May low of $16.07. First resistance is seen at $17.00 and then at $17.11. Next support is seen at Monday’s low of $16.77 and then at $16.645. Wyckoff's Market Rating: 6.0.
July N.Y. copper closed down 45 points at 325.30 cents today. Prices closed near mid-range on mild profit taking after hitting a 4.5-month high late last week. The copper bulls still have the firm overall near-term technical advantage. A bull flag or bullish pennant pattern may be forming on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the December high of 334.20 cents. The next downside price objective for the bears is closing prices below solid technical support at this week’s low of 309.00 cents. First resistance is seen at 327.50 cents and then at 330.00 cents. First support is seen at today’s low of 323.35 cents and then at 321.80 cents. Wyckoff's Market Rating: 7.0.