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Gold Prices Pop On Surprisingly Dovish FOMC Statement

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Live 24 hours gold chart [Kitco Inc.]

(Kitco News) - Gold and silver prices are moderately higher and hit daily highs in early-afternoon U.S. trading Wednesday. Gold prices also hit a three-week high, post-FOMC. The metals are lifted by a surprisingly more dovish tone coming from the FOMC statement that was just released. Now, the markets await the post-FOMC press conference from Fed Chairman Jay Powell. April gold futures were last up $6.50 an ounce at $1,313.10. May Comex silver was last up $0.108 at $15.475 an ounce.

The Federal Open Market Committee (FOMC) meeting that began Tuesday morning and ended moments ago showed the Fed has taken another strong step in the direction of easier U.S. monetary policy. The FOMC statement said the Fed would keep U.S. interest rates unchanged and plans no more rate hikes this year. The Fed will also taper its balance sheet runoff starting in May and end it in October. Beginning in October the Fed plans to reinvest mortgage-backed securities into U.S. Treasuries. The statement also said the U.S. labor market remains strong but U.S. economic growth has slowed a bit, as evidenced by slower household spending and lower business investment. The FOMC members said inflationary pressures have eased, mostly due to lower energy prices. The U.S. stock indexes also made advances on the surprisingly dovish Fed statement. The U.S. dollar index sold off and hit its daily lows on the Fed news.

Risk appetite in the world marketplace remains upbeat, as there are no major geopolitical matters moving the world markets. This has been a constraining factor for price advances in the safe-haven gold and silver markets.

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News reports are saying the U.S. and China are moving closer to a formal trade agreement after the two largest economies in the world fought a trade war for months. Reports said U.S. Treasury Secretary Mnuchin and U.S. Trade Representative Lighthizer are traveling to China next week for high-level discussions to try to get a deal wrapped up. Some are now speculating that a deal will be reached, but it won’t include important demands the U.S. had made, such as theft of intellectual property.

The key outside markets today see the U.S. dollar index slightly firmer on an upside correction after hitting a three-week low Tuesday. The greenback bulls have faded recently. Meantime, Nymex crude oil prices are modestly lower and trading just below $59.50 a barrel. Oil prices hit a four-month high Tuesday.

Live 24 hours gold chart [Kitco Inc.]

Technically, April gold futures bulls have the overall near-term technical advantage and gained some fresh power today. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,330.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the March low of $1,280.80. First resistance is seen at $1,320.00 and then at $1,325.00. First support is seen at $1,305.00 and then at $1,300.00. Wyckoff's Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures bulls have the overall near-term technical advantage and gained some fresh power today. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $15.75 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the March low of $14.985. First resistance is seen at last week’s high of $15.55 and then at $15.75. Next support is seen at this week’s low of $15.22 and then at last week’s low of $15.135. Wyckoff's Market Rating: 6.5.

May N.Y. copper closed up 10 points at 292.45 cents today. Prices closed nearer the session high today. The copper bulls have the overall near-term technical advantage. Prices are in a 10-week-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the February high of 297.75 cents. The next downside price objective for the bears is closing prices below solid technical support at 280.00 cents. First resistance is seen at this week’s high of 294.40 cents and then at last week’s high of 295.70 cents. First support is seen at this week’s low of 289.90 cents and then at the March low of 2.87.45 cents. Wyckoff's Market Rating: 6.5.

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