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Gold, Silver Up, Add to Gains After FOMC Meeting Ends

(Kitco News) - Gold and silver prices were ending the U.S. day session higher and near their daily highs Wednesday.  Short covering in the futures market and bargain hunting in the cash market were featured in both markets. August Comex gold was last up $10.20 an ounce at $1,331.40. September Comex silver was last up $0.507 at $20.19 an ounce.

The afternoon FOMC statement that showed no change in U.S. interest rates did not move gold and silver markets much, initially, but they began to rally after traders and investors reckoned the statement did not contain any new hawkish elements on U.S. monetary policy, and arguably favored the doves. The FOMC statement also said U.S. interest rates will rise only slowly over time but did say the U.S. economy is on the upswing.

Earlier today, gold prices received a slight boost when a much-weaker-than-expected U.S. durable goods orders report was released. Durables orders were down 4.0% in June for the largest decline in two years. A drop of 1.4% was expected.

World stock markets were mostly higher Wednesday and U.S. stock indexes were mixed in afternoon New York trading. There continues to be a general “risk-on” attitude among traders and investors, which has boosted world stock markets to record or multi-year highs recently.

The major events in the marketplace this week are central bank meetings in the U.S. and Japan. With the FOMC meeting just concluded, attention turns to the Bank of Japan meeting Thursday and Friday. It is expected the BOJ will announce some sort of a new monetary policy stimulus package. A Japanese newspaper reported Tuesday that any announced BOJ stimulus package will not be an aggressive one. Another Japanese newspaper report Wednesday said upcoming monetary policy stimulus will indeed be robust.

The key “outside markets” on Wednesday saw the U.S. dollar index firmer and Nymex crude oil prices weaker. Nymex crude oil futures are hovering just below $42.00 a barrel and hit a three-month low today. There are concerns about a world oil supply glut weighing down oil prices for quite some time to come.

(Note: Follow me on Twitter--@jimwyckoff--for breaking market news.)

Live 24 hours gold chart [Kitco Inc.]

Technically, gold bulls still have the overall near-term technical advantage, but have faded recently. Prices have been trending lower for three weeks. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,350.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,300.00. First resistance is seen at $1,334.00 and then at $1,338.80. First support is seen at $1,320.00 and then at last week’s low of $1,310.70. Wyckoff’s Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures prices were nearer the session high in late trading. The silver market bulls have the overall near-term technical advantage and regained some upside momentum today. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $21.22 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $19.00. First resistance is seen at last week’s high of $20.295 and then at $20.50. Next support is seen at $20.00 and then at today’s low of $19.575. Wyckoff's Market Rating: 6.5.

September N.Y. copper closed down 410 points at 218.45 cents today. Prices closed nearer the session low and hit a two-week low today. The copper bulls have lost their overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the July high of 227.75 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the July low of 211.65 cents. First resistance is seen at 220.00 cents and then at today’s high of 223.45 cents. First support is seen at today’s low of 218.15 cents and then at 216.00 cents. Wyckoff's Market Rating: 5.0.

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 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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