Gold Moderately Up On Corrective Bounce, Friendly FOMC Minutes
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(Kitco News) - Gold prices were moderately higher in early-afternoon U.S. trading Wednesday. Early losses were erased as bargain hunters “bought the dip” that had occurred this week. A slightly bullish FOMC minutes report also gave the gold and silver markets a lift. December Comex gold was last up $7.00 an ounce at $1,286.70. September Comex silver was last up $0.291 at $17.005 an ounce.
The early afternoon release of the minutes of the last Federal Open Market Committee (FOMC) meeting that was held in July showed committee members were split on raising U.S. interest rates in the near future. Many members were concerned about the recent data coming out of the major world economies that shows generally very low price inflation levels that suggest there is no hurry in trying to get interest rates back to what would be historical normal levels.
Gold prices had been pressured the first half of this week by a significant uptick in investor risk appetite—mainly due to perceptions the U.S.-North Korea stand-off on North Korea’s nuclear missiles has calmed down a bit.
However, reports said the U.S. and South Korean militaries will hold joint exercises next week, which are likely to again rile up North Korean leader Kim Jong Un. The U.S.-North Korea matter is not going to go away any time soon. Any flare-up in tensions is likely to see another rush by investors and traders into gold and U.S. Treasuries.
The U.S. dollar index was slightly lower and near its daily low in early afternoon U.S. trading Wednesday. But the greenback bulls are having the better week. The index hit a three-week high early on today. The pullback in the dollar index also prompted some fresh buying interest in the gold and silver markets Wednesday.
Meantime, Nymex crude oil futures were lower and hit a three-week low Wednesday. Today’s weekly DOE liquid energy stocks report was deemed bearish as rising U.S. production more than offset a decline in stockpiles of U.S. crude.
Technically, December gold futures bulls have the overall near-term technical advantage. A five-week-old uptrend is in place on the daily bar chart. Bulls’ next upside technical objective is pushing prices above chart resistance at $1,300.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at last week’s low of $1,257.10. First resistance is seen at $1,290.00 and then at last week’s high of $1,298.10. First support is seen at $1,280.00 and then at this week’s low of $1,272.70. Wyckoff’s Market Rating: 6.5
September silver bulls have the overall near-term technical advantage. Silver prices are still in a five-week-old uptrend on the daily bar chart. The next upside price breakout objective is closing futures 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 $16.00. First resistance is seen at last week’s high of $17.24 and then at $17.50. Next support is seen at this week’s low of $16.56 and then at $16.25. Wyckoff's Market Rating: 6.0.