Gold, Silver Weaker Ahead Of FOMC Conclusion
(Kitco News) - Gold and silver prices are again mildly lower in early U.S. trading Wednesday. There continues to be a lack of major news to support the safe-haven metals, which is allowing the bearish chart postures to entice technical sellers in the futures markets. December gold futures were last down $1.20 an ounce at $1,232.40. September Comex silver was last down $0.069 at $15.49 an ounce.
The just-released ADP national employment report for July showed a rise of 219,000. The number is higher than the expected rise of 185,000. This number comes ahead of the more important U.S. non-farm payroll number on Friday, which is forecast to come in at up 190,000 in July. The metals markets reacted little to the ADP news.
World stock markets were mostly lower overnight, on renewed worries about the U.S. imposing new tariffs on Chinese imports. Reports said some of President Trump’s advisors are advising him to sharply ramp up tariffs on China. And once again, China said it would retaliate if the U.S. set new tariffs on Chinese goods. U.S. stock indexes are pointed toward mixed openings when the New York day session begins.
In focus today is the FOMC meeting of the Federal Reserve that began Tuesday morning ends Wednesday afternoon with a statement. No changes in Fed policy are expected at this meeting, but as usual traders will parse the Fed statement on clues for futures monetary policy moves and timing.
The Bank of England meets Thursday for its regular monetary policy gathering. No changes in policy are expected from the BOE.
In overnight news, the Euro zone July manufacturing purchasing managers index (PMI) came in at 55.1, which was right in line with market expectations and compares to the 54.9 reading in June. A number above 50.0 suggests growth in the sector.
The key “outside markets” today find Nymex crude oil prices lower and trading just above $68.00 a barrel. The U.S. dollar index is slightly higher early today. These two markets are in a bearish daily posture for the precious metals markets.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the U.S. manufacturing PMI, the global manufacturing PMI, construction spending, the ISM manufacturing report on business, and the weekly DOE liquid energy stocks report.
Technically, gold bears have the solid overall near-term technical advantage amid a price downtrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close in December futures above solid resistance at $1,250.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,200.00. First resistance is seen at this week’s high of $1,237.80 and then at last week’s high of $1,244.70. First support is seen at $1,225.00 and then at the July low of $1,221.00. Wyckoff's Market Rating: 2.0
September silver futures bears have the solid overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at last week’s high of $15.70 and then at $15.90. Next support is seen at last week’s low of $15.34 and then at the July low of $15.185. Wyckoff's Market Rating: 1.5.