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Gold Sees Moderate Rally in Aftermath of FOMC Leaving Rates Unchanged

(Kitco News) - Gold prices are moderately higher in afternoon U.S. trading Thursday, as prices rallied in the wake of the FOMC holding steady on its monetary policy and not raising U.S. interest rates. The U.S. dollar index extended its earlier losses on the FOMC news, which also helped the precious metals market bulls. As of this writing traders were awaiting Fed Chair Janet Yellen’s press conference, which could yield further clues on the timing of a U.S. rate hike. December Comex gold was last up $11.20 at $1,129.90 an ounce. December Comex silver was last up $0.31 at $15.195 an ounce.

After weeks and even months of speculation about this meeting, the Federal Open Market Committee meeting that began Wednesday morning ended Thursday afternoon saw the Fed leave its monetary policy unchanged. While there was no consensus among traders and investors on whether the Fed would or wouldn’t make an interest rate hike for the first time in several years at this week’s meeting, there seemed to be a growing sense the Fed would make a rate hike at this meeting. Rising U.S. Treasury bond and note yields (falling prices) this week did suggest the Fed would raise interest rates on Thursday.

The market place was relatively calm, overall, after the FOMC statement. I can be argued that nobody was completely surprised by this afternoon’s FOMC results, just because there was no clear consensus on its outcome.

Asian stock markets were mixed Thursday. China’s Shanghai stock index was down 2.1% on the day. Japan’s Nikkei stock index was up 1.4% Thursday. European and U.S. stock indexes were weaker Thursday morning.

The London P.M. gold fix today was $1,117.50 versus the previous London A.M. fixing of $1,118.15.

Technically, December gold futures prices were nearer the session high this afternoon. Gold bears still have the overall near-term technical advantage. However, the bulls have gained a bit of upside technical momentum late this week. A bullish weekly high close on Friday would hint that a market bottom is in place. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the September high of $1,147.30. Bears' next near-term downside price breakout objective is closing prices below solid technical support at last week’s low of $1,097.70. First resistance is seen at $1,133.50 and then at $1,140.00. First support is seen at today’s low of $1,114.70 and then at $1,110.00. Wyckoff’s Market Rating: 3.0

December silver futures prices were nearer the session high and hit a three-week high again today. Silver bears still have the overall near-term technical advantage. However, the bulls have gained a bit of upside technical momentum late this week. A bullish weekly high close on Friday would hint that a market bottom is in place. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the August high of $15.77 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at this week’s low of $14.24. First resistance is seen at today’s high of $15.275 and then at $15.50. Next support is seen at $15.00 and then at today’s low of $14.77. Wyckoff's Market Rating: 3.0.

December N.Y. copper closed up 90 points at 246.10 cents today. Prices closed nearer the session high and closed at a two-month high close today. Bulls have upside momentum to suggest that a market bottom is in place. Copper bears do still have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 250.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the August low of 220.25 cents. First resistance is seen at last week’s high of 247.55 cents and then at 250.00 cents. First support is seen at today’s low of 243.30 cents and then at 241.30 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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