Gold Prices Weaken Following FOMC Minutes; Normal Profit Taking Featured
(Kitco News) - Gold prices are trading moderately down in early-afternoon U.S. trading Wednesday. The yellow metal has seen its price back off after the release of the Federal Reserve’s FOMC minutes. Gold prices early on today hit a 10-month high. Chart-based buying is featured this week in both gold and silver markets, as both metals have seen their technical postures improve just recently. April gold futures were last down $0.60 an ounce at $1,344.10. March Comex silver was last up $0.108 at $16.065 an ounce.
The U.S. economic data point of the day is the just-released Federal Reserve FOMC minutes. The minutes expressed some more concern regarding risks to U.S. economic growth, which the Fed says has moderated in recent months. The Fed sees few risks in leaving monetary policy steady, at present. The minutes also said the Fed will exercise “patience” on future interest rate hikes, adding the FOMC will also continue to be data-dependent. FOMC members want to see the unwinding of the big Fed balance sheet of securities stop later this year.
While the FOMC minutes did not contain any surprises, it appears short-term gold traders took the opportunity to take some profits after the report and following recent strong gains.
The recent change in Fed policy stance to one of more accommodative monetary conditions has been a significantly bullish underlying factor for several commodity markets, including the precious metals. It’s also been bullish for world stock and bond markets.
At mid-week there appears to be slightly more optimism in the ongoing U.S.-China trade talks, taking place this week in Washington, D.C. President Trump on Tuesday said there could be flexibility on the early-March deadline for more U.S. trade tariffs to be imposed on China. Ideas are still widely mixed on whether any final deal will be reached any time soon. China’s state media Wednesday said there would be catastrophic economic consequences if the U.S. slapped new sanctions on China.
The U.K. Brexit saga continues to play out, as four MP’s that were aligned with Prime Minister Theresa May dropped their affiliation with her. There is still no deal in place as the late-March deadline approaches for the U.K. to leave the European Union.
The key outside markets today see the U.S. dollar index slightly lower after seeing a bigger corrective pullback Tuesday. Nymex crude oil prices are higher and hit another three-month high today. Prices are in a good uptrend from the Dec. 24 low of just above $42.50 a barrel.
Technically, April gold futures bulls have the solid overall near-term technical advantage and have gained more power this week to suggest still more upside in the near term. A nearly three-month-old price uptrend is in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,400.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the February low of $1,304.70. First resistance is seen at $1,350.00 and then at $1,365.00. First support is seen at $1,340.00 and then at $1,331.10. Wyckoff's Market Rating: 7.5
March silver futures prices closed near the session high and closed at a seven-month high close today. The silver bulls have the overall near-term technical advantage and have gained fresh power this week. Prices are in a two-month-old price uptrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the February low of $15.445. First resistance is seen at the January high of $16.20 and then at $16.50. Next support is seen at $16.00 and then at this week’s low of $15.715. Wyckoff's Market Rating: 6.5.
March N.Y. copper closed up 455 points at 292.00 cents today. Prices closed near the session high and hit another 4.5-month high today. The copper bulls have the overall near-term technical advantage and have gained power this week. Prices have been trending higher for seven weeks. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 300.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 275.00 cents. First resistance is seen at today’s high of 292.45 cents and then at 295.00 cents. First support is seen at 2.9000 cents and then at today’s low of 286.90 cents. Wyckoff's Market Rating: 6.5.