Gold, Silver Prices Pop On Surprisingly Dovish Remarks From Fed's Powell
(Kitco News) - Gold and silver prices are solidly higher in early-afternoon U.S. trading Wednesday. Both metals pushed higher in the immediate aftermath of dovish comments from Federal Reserve Chairman Jerome Powell. February gold futures were last up $10.90 an ounce at $1,230.00. March Comex silver was last up $0.239 at $14.46 an ounce.
Powell surprised the markets today by delivering dovish remarks on U.S. monetary policy in a speech to the Economic Club of New York. Powell said at present, U.S. interest rates are just below “neutral” levels and that the Fed will remain data dependent, with no set path on adjusting interest rates. Traders and investors interpreted Powell’s comments as meaning the Fed will likely raise interest rates slightly at its December meeting, but after that all bets are off. Prior to Powell’s speech, the sense of the marketplace was that the Federal Reserve would continue on a gradual rate-hike course in 2019. Powell also intimated that U.S. inflation is not at all problematic at present. The U.S. stock market rallied strongly on the news, while the U.S. dollar index sold off moderately.
Today’s second estimate of third-quarter U.S. GDP showed an annual growth rate of 3.5%, which was right in line with market expectations. The price index (an inflation indicator) was up 1.7% on an annual basis, which was also in line with forecasts. Gold and silver prices showed no significant reactions to the report.
Focus this week is on the upcoming Group of 20 meetings that begin Friday in Argentina and will feature a face-to-face meeting between the U.S. and Chinese presidents on Saturday. The world’s two largest economies are locked in a heated trade war. President Trump made hardline comments on the matter Monday, but his chief economic advisor on Tuesday sent mixed signals on any hopes for an agreement this weekend. There is general agreement that the trade war is hurting China’s economy much more than the U.S. economy.
Nymex crude oil futures prices are just slightly lower today, on a pause. Prices Monday hit a 13-month low of $50.10. Crude prices are down around 30% following the recent sharp declines. A key OPEC oil cartel meeting is scheduled for next week.
Technically, the gold bears still have the overall near-term technical advantage but the bulls gained some upside momentum today. Gold bulls' next upside near-term price breakout objective is to produce a close in February futures above solid technical resistance at the October high of $1,252.00. 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 $1,234.50 and then at $1,245.00. First support is seen at $1,220.00 and then at today’s low of $1,216.80. Wyckoff's Market Rating: 3.5
The silver bears still have the firm overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing March futures prices above solid technical resistance at the October high of $15.055 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.75. First resistance is seen at this week’s high of $14.545 and then at last week’s high of $14.66. Next support is seen at this week’s low of $14.185 and then at $14.00. Wyckoff's Market Rating: 2.0.
March N.Y. copper closed up 900 points at 281.55 cents today. Prices closed near the session high on short covering. The copper bears still have the slight overall near-term technical advantage but the bulls gained momentum today. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the November high of 284.80 cents. The next downside price objective for the bears is closing prices below solid technical support at the November low of 266.20 cents. First resistance is seen at the November high of 284.80 cents and then at the September high of 288.80 cents. First support is seen at 280.00 cents and then at 277.00 cents. Wyckoff's Market Rating: 4.5.