Gold Weaker Ahead Of Highly Anticipated FOMC Decision
(Kitco News) - Gold prices are modestly weaker in early U.S. trading Wednesday, on some position evening ahead of one of the most highly anticipated FOMC meeting conclusions in years. February gold futures were last down $1.80 an ounce at $1,251.80. March Comex silver was up $0.024 at $14.725 an ounce.
Focus today is squarely on the U.S. Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement. Many still expect the FOMC to raise interest rates by 0.25% this afternoon. However, the likelihood for a rate hike today has come into question after proclamations from President Trump, his closes economic advisors and noted market analysts and traders that the Fed should leave interest rates alone. Federal Reserve Chairman Jerome Powell holds a press conference this afternoon, after the FOMC meeting. Look for more active markets this afternoon.
European stock markets were mostly firmer overnight, while Asian shares were mostly weaker. U.S. stock indexes are pointed toward higher openings when the New York day session begins, on a rebound after the indexes fell to new low closes for the year on Tuesday. Gold, the U.S. dollar and U.S. Treasuries have been supported recently by the wobbly and volatile U.S. stock market.
Chinese economic and political officials are holding key meetings this week, at which major economic initiatives are being discussed and could be announced. China’s economy has been pinched this year by tariffs imposed by the U.S. on China’s imports.
It now appears less likely the U.S. government will shut down Friday, as reports say the Trump administration is likely to come to an agreement with Congress on a budget.
The key outside markets today see the U.S. dollar index lower on a further corrective pullback after hitting a nearly two-year high last week. Meantime, raw commodity sector leader Nymex crude oil prices are slightly firmer on tepid short covering after careening to a 15-month low of $45.79 a barrel on Tuesday. There are still no early chart clues the crude oil market is near a bottom.
A heavy slate of U.S. economic data is also due out later this week, including the first estimate of third-quarter gross domestic product on Friday morning.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, international transactions and the current account, existing home sales, and the weekly DOE liquid energy stocks report.
Technically, gold bulls have the overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at the December high of $1,256.60. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,220.00. First resistance is seen at the overnight high of $1,255.30 and then at $1,256.60. First support is seen at Tuesday’s low of $1,249.00 and then at this week’s low of $1,239.40. Wyckoff's Market Rating: 6.0
March silver futures bears still have the overall near-term technical advantage. However, a choppy five-week-old uptrend is in place on the daily bar chart. Silver bulls' next upside price breakout objective is closing 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 the November low of $13.985. First resistance is seen at last week’s high of $14.90 and then at $15.00. Next support is seen at last week’s low of $14.56 and then at $14.28. Wyckoff's Market Rating: 3.5.