Gold Upticks Slightly Following FOMC Minutes
(Kitco News) - Gold prices were trading slightly higher in U.S. trading early Wednesday afternoon, on a mildly bullish reaction to the just-released FOMC minutes. There had recently been a lack of new, bullish fundamental inputs for the safe-haven metal. This had allowed the sellers to gain a bit of momentum this week. June Comex gold was last up $0.30 an ounce at $1,255.70. July Comex silver was last down $0.004 at $17.135 an ounce.
The just-released Federal Reserve’s FOMC minutes from the early-May meeting showed committee members agreeing the Federal Reserve’s balance sheet should be reduced by capping securities purchases and reinvestment. The FOMC members still see the Fed raising interest rates at a gradual pace despite the U.S. economy slowing down a bit in the first quarter. The marketplace expects more slight interest rate increases from the Fed this year. The Fed made its last interest rate increase in March.
The gold market did move up to near its daily highs after the FOMC minutes, likely because the minutes did not contain any monetary-policy-hawkish surprises. There is also now some thinking in the marketplace that the Fed does not have to make a rate hike at its June FOMC meeting.
In other news Wednesday, Moody’s credit rating service lowered its sovereign credit rating for China for the first time in about 30 years, citing China’s rising debt and slowing rate of economic growth. China’s stock market saw selling pressure on the Moody’s news. Other markets worldwide did not show significant reactions to the surprise move by Moody’s.
The key outside markets on Wednesday saw the U.S. dollar index trade near steady. The greenback bulls are trying to stabilize the index after it hit a six-month low Monday. The dollar index bears remain in firm near-term technical control. Meantime, Nymex crude oil futures prices were slightly lower. Crude oil prices have trended solidly higher recently, to suggest sideways, or sideways-to-higher, price action in the near term. Reports Wednesday afternoon said the OPEC meeting on Thursday will see cartel members extend their lower production quotas that were implemented last fall.
Technically, June gold futures prices closed nearer the session high today. The gold bulls still have the slight overall near-term technical advantage, but need to show fresh power soon to keep it. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at last week’s low of $1,226.80. First resistance is seen at last week’s high of $1,265.00 and then at $1,268.00. First support is seen at today’s low of $1,247.60 and then at 1,241.50. Wyckoff's Market Rating: 5.5
July silver futures prices closed nearer the session high and saw mild profit taking after hitting a four-week high on Tuesday. The silver market bears have the overall near-term technical advantage. However, the bulls have momentum to suggest a market bottom is in place. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $18.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the May low of $16.06. First resistance is seen at this week’s high of $17.305 and then at $17.50. Next support is seen at this week’s low of $16.84 and then at $16.60. Wyckoff's Market Rating: 3.0.
July N.Y. copper closed down 80 points at 258.80 cents today. Prices closed nearer the session high today. The copper bears have the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 270.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the December low of 246.25 cents. First resistance is seen at this week’s high of 260.45 cents and then at 262.50 cents. First support is seen at today’s low of 255.55 cents and then at 252.50 cents. Wyckoff's Market Rating: 4.5.