Gold Up, But Down From Daily High, Post-FOMC

(Kitco News) - Gold prices ended the U.S. day session modestly higher but down from the session high after hitting a two-week high overnight.  Silver prices have also seen solid gains the past 24 hours and are now trading not far below the multi-year high scored in early July. A perceived dovish FOMC statement Wednesday afternoon and a lower U.S. dollar index worked to lift the precious metals markets. August Comex gold was last up $5.50 an ounce at $1,332.20. September Comex silver was last up $0.225 at $20.22 an ounce.

Traders and investors worldwide were still digesting Wednesday afternoon’s statement from the U.S. Federal Reserve’s Open Market Committee (FOMC). There was no change in U.S. monetary policy announced. However, the statement was deemed a bit dovish and seemed to reduce the likelihood of an interest rate increase occurring in September.

With the FOMC meeting out of the way, attention turns to the Bank of Japan meeting that began Thursday and ends Friday. It is expected the BOJ will announce some sort of a new monetary policy stimulus package. This risk now appears to be a package that will disappoint Asian markets—due to high expectations for such an aggressive monetary stimulus package already in the marketplace.

The other key “outside market” on Thursday saw Nymex crude oil prices lower, hitting a three-month low and hovering just above $41.00 a barrel. The down-trending crude oil market has been a bearish weight on the gold market recently. If crude continues to trend lower, it will be tough for gold and silver bulls to make a lot of upside headway.

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Technically, August gold futures prices closed nearer the session low after hitting a two-week high early on today. The gold bulls have the overall near-term technical advantage and have regained some upside momentum. A three-week-old downtrend has been negated. 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 today’s high of $1,344.30 and then at $1,350.00. First support is seen at $1,330.00 and then at $1,325.00. Wyckoff’s Market Rating: 6.5

September silver futures prices hit a two-week high today. The silver market bulls have the firm overall near-term technical advantage and have regained upside momentum. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the July high of $21.225 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 today’s high of $20.585 and then at $20.76 Next support is seen at $20.00 and then at $19.75. Wyckoff's Market Rating: 7.0.

September N.Y. copper closed up 240 points at 220.95 cents today. Prices closed near mid-range and saw short covering. The copper bulls and bears are on a level overall near-term technical playing field. 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 today’s high of 222.50 cents and then at 223.45 cents. First support is seen at this week’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
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