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Gold Prices See Mild Uptick in Wake of FOMC Statement

(Kitco News) - Gold prices are modestly higher in afternoon U.S. trading Wednesday, in the wake of the just-released FOMC statement that contained no significant surprises. However, the U.S. dollar index did weaken following the FOMC statement, which gave the gold and silver markets a mild boost. The presently bearish near-term technical postures for gold and silver are still keeping many buyers on the sidelines. August Comex gold was last up $2.20 at $1,183.20 an ounce. July Comex silver was last up $0.095 at $16.06 an ounce.

The Federal Reserve’s Open Market Committee (FOMC) statement said U.S. economic growth is improving but gave no specifics on the timing of any U.S. interest rate hike. Market participants were awaiting a press conference from Fed Chair Janet Yellen. She could provide some fresh fodder for which markets could react--such as commenting on Greece, the timing of the next U.S. rate hike, or on U.S. inflation prospects. Most market watchers did not expect the FOMC to raise interest rates today, but instead do so in September or later.

European stock markets were lower again Wednesday amid worries about Greece defaulting on its debt obligations to the European Union and International Monetary Fund. The European Central Bank on Wednesday authorized more emergency loan money to Greece. Greece-EU debt negotiations broke down Sunday. Greece’s prime minister is now talking a hard line against the EU and IMF, which makes the situation even more dire. Greece’s central bank on Wednesday warned of an “uncontrollable crisis” if the debt talks ultimately fail. Greek bond yields have this week pushed above 29% for the two-year note. The market place is realizing Greece will probably default on its debt payments. This means when the event actually occurs, markets price action will probably not be too volatile because the event will have already been factored in to markets’ price structures.

The London P.M. fix is $1,178.00 versus the previous A.M. fixing of $1,178.50.

Technically, August gold futures prices were nearer the session high in afternoon action. Gold bears have the overall near-term technical advantage. A four-week-old downtrend is in place on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,200.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the June low of $1,161.00. First resistance is seen at Tuesday’s high of $1,187.40 and then at last week’s high of $1,191.80. First support is seen at today’s low of $1,173.90 and then at this week’s low of $1,171.90. Wyckoff’s Market Rating: 2.5

July silver futures were near mid-range in afternoon trading. Silver bears have the firm overall near-term technical advantage. A four-week-old downtrend is in place on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $16.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the April low of $15.595. First resistance is seen at Tuesday’s high of $16.105 and then at this week’s high of $16.235. Next support is seen at last week’s low of $15.77 and then at $15.595. Wyckoff's Market Rating: 2.5.

July N.Y. copper closed down 35 points at 261.15 cents today. Prices closed near mid-range and hit another three-month low today. Copper bears have the firm near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the June high of 276.70 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the March low of 255.40 cents. First resistance is seen at today’s high of 263.25 cents and then at 265.00 cents. First support is seen at today’s low of 259.80 cents and then at 257.50 cents. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff

 

 

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