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P.M. Kitco Metals Roundup: Gold Sheds Modest Gains in Wake of Mildly Bearish FOMC Statement

Wednesday October 30, 2013 2:33 PM

(Kitco News) - Gold prices were trading modestly lower in afternoon dealings Wednesday, following the much-anticipated statement from the Federal Reserve’s Open Market Committee that was deemed a bit bearish by the raw commodity markets. December Comex gold was last down $4.70 at $1,340.70 an ounce. Spot gold was last quoted down $3.30 at $1341.50. December Comex silver last traded up $0.078 at $22.57 an ounce.

As expected, the FOMC left its very accommodative U.S. monetary policy unchanged. However, many markets deemed a bit bearish the FOMC’s remark that the U.S. economy does not have as much downside risk as that seen in previous months. Traders and investors extrapolated this to suggest the Fed could start to “taper” its monthly bond-buying program (QE) a bit earlier than many now reckon. The sense of the market place had been that the Fed would not start to cut back on its monthly bond purchases until early next year—most likely the second quarter at the earliest. Still, the latest FOMC statement, overall, does not strongly suggest a major change in that thinking by the market place.

In other U.S. economic news, the U.S. ADP national employment report for October showed a rise in non-farm jobs of 130,000, which was less than the consensus forecast of a rise of 150,000.  Gold rallied to its session high and the U.S. dollar index weakened on the ADP report.

Economic data coming out of Europe this week has been mostly upbeat, but has been overshadowed by anticipation ahead of the FOMC statement. The rise in short-term interest rates in China remains a bit of a worry to the world market place. China is the second-largest world economy and a voracious consumer of raw commodities. Any significant changes in Chinese monetary policy—especially tightening of it--would impact world markets.

The London P.M. gold fix is $1,354.75 versus the previous P.M. fixing of $1,349.25.

Technically, December gold futures prices were nearer the session low in afternoon trading. The gold market bulls and bears are still on a level near-term technical playing field. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,375.40. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,300.00. First resistance is seen at this week’s high of $1,361.80 and then at $1,375.40. First support is seen at Wednesday’s low of $1,338.30 and then at $1,330.00. Wyckoff’s Market Rating: 5.0

December silver futures hit a fresh six-week high early on Wednesday. The silver bulls have now gained the slight near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $23.445 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $22.00. First resistance is seen at $21.91 and then at Wednesday’s high of $23.095. Next support is seen at this week’s low of $22.30 and then at $22.00. Wyckoff's Market Rating: 5.5.

December N.Y. copper closed up 340 points at 331.20 cents Wednesday. Prices closed nearer the session high. Bulls and bears are still on a level near-term technical playing field. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the October high of 335.50 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the October low of 321.50 cents. First resistance is seen at Wednesday’s high of 332.80 cents and then at 335.50 cents. First support is seen at 330.00 cents and then at Wednesday’s low of 327.30 cents. Wyckoff's Market Rating: 5.0

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By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com

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 precious metal products, 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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