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Gold, Silver Prices Weaker As FOMC Minutes On Deck

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(Kitco News) - Gold and silver prices are trading modestly down in early U.S. trading Wednesday. The marketplace is on hold ahead of a key data point this afternoon. June gold futures were last down $2.30 an ounce at $1,306.30. May Comex silver was last down $0.036 at $15.175 an ounce.

The major U.S. data points today include the just-released consumer price index for March, which came in at up 0,4% from February and up 1.9%, year-on-year. The report was expected to be up 0.3% from February and up 1.8%, year-on-year. Markets showed no major reactions to the news.

The marketplace is now awaiting the afternoon release of the minutes of the last Federal Open Market Committee meeting. The FOMC minutes in the past have sparked higher volatility in markets, in the immediate aftermath of their releases.

The European Central Bank held its regular monetary policy meeting Wednesday and left interest rates and policy unchanged, as expected. Traders will closely monitor remarks from ECB President Mario Draghi at his press conference.

Asian and European stock indexes were mixed in uneventful trading overnight. U.S. stock indexes are pointed toward modestly higher openings when the New York day session begins.

Traders and investors in stocks and stock indexes are not quite as upbeat at mid-week. President Trump on Monday threatened the European Union with $11 billion in tariffs on EU imports of several products into the U.S. Meantime, the U.S. is still fighting a trade war with China, and an escalation in trade tensions with the EU would mean the world’s three largest economies are sanctioning each other.

The International Monetary Fund on Tuesday forecast slowing global growth, at 3.3% in 2019 versus its last forecast of 3.5% growth, mainly due to the U.S. battling other economies over trade issues.

On the Brexit front, European Union officials will meet today to discuss extending a window for the U.K. to leave the bloc. If no extension is granted by the EU, then this Friday the U.K. would see a “hard exit,” which could roil European stock and financial markets.

The key outside markets today find the U.S. dollar index weaker as prices this week are seeing a corrective pullback from recent gains. Meantime, Nymex crude oil prices are higher, near Tuesday’s five-month high and trading around $64.50 a barrel.

Other U.S. economic reports due for release Wednesday include the weekly MBA mortgage applications survey, real earnings, the weekly DOE liquid energy stocks report, and the monthly Treasury budget statement.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the overall near-term technical advantage. A downtrend line is still in place on the daily bar chart, but now just barely. Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the March high of $1,330.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at last week’s low of $1,284.90. First resistance is seen at this week’s high of $1,310.40 and then at $1,313.00. First support is seen at $1,300.00 and then at this week’s low of $1,295.50. Wyckoff's Market Rating: 6.0

Live 24 hours silver chart [ Kitco Inc. ]

May silver futures bears have the slight overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the March high of $15.65 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.75. First resistance is seen at this week’s high of $15.31 and then at 15.50. Next support is seen at this week’s low of $15.075 and then at $15.00. Wyckoff's Market Rating: 4.5.

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