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Gold Sees Gains In Wake Of Dovish FOMC Statement

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(Kitco News) - Gold prices are posting moderate gains in afternoon U.S. trading Wednesday, in the immediate aftermath of a bullish FOMC statement from the Federal Reserve. August gold futures were last up $3.10 an ounce at 1,354.00. July Comex silver prices were last up $0.032 at $15.025 an ounce.

The just-concluded Federal Open Market Committee (FOMC) meeting that began Tuesday morning saw no change in U.S. interest rates. The majority of Fed watchers believed the Fed would not lower interest rates at this meeting. However, the FOMC statement said the committee would lower interest rates in the coming months if U.S. economic growth begins to slow down. The FOMC expects the U.S. economic expansion to continue but “uncertainties about this outlook have increased,” the statement said. About half of the FOMC members expect the Fed to make at least one interest rate reduction this year. The FOMC statement did eliminate the word “patient” from its monetary policy stance. The marketplace is giving the FOMC statement a dovish read on U.S. monetary policy, which boosted the metals markets. U.S. Treasuries saw their yields decline and the U.S. stock indexes moved up modestly. Traders and investors are now awaiting Fed Chairman Jay Powell’s press conference, set to begin shortly.

The Bank of England and Bank of Japan also hold their regular monetary policy meetings this week.

European stock indexes were mostly weaker Wednesday, while Asian shares were mostly up. Asian investors were encouraged by a tweet from President Trump on Tuesday that said he and Chinese President Xi had a good telephone conversation and they will meet at next week’s G-20 conference in Japan.

Geopolitics is still not far from the front burner of the marketplace. The U.S.-Iran tensions have been ratcheted up a notch as the U.S. is sending 1,000 more troops to the Persian Gulf region to bolster is task force that is already patrolling waters. Iran’s government on Monday said it is producing more enriched uranium that could be used in a nuclear weapon. This situation could very quickly escalate and is not just going to fade away.

The key “outside markets” today see Nymex crude oil prices near steady and trading just below $54.00 a barrel. Meantime, the U.S. dollar index is a bit weaker on a corrective pullback from recent good gains. 

Live 24 hours gold chart [Kitco Inc.]

Technically, August gold futures bulls have the solid overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at the June high of $1,362.20. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,323.60. First resistance is seen at the June high of $1,362.20 and then at $1,370.00. First support is seen at $1,350.00 and then at today’s low of $1,344.80. Wyckoff's Market Rating: 7.5

Live 24 hours silver chart [ Kitco Inc. ]

July silver futures bears still have the overall near-term technical advantage. However, bulls are working on a fledgling price uptrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at the June high of $15.15 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the May low of $14.265. First resistance is seen at $15.15 and then at $15.25. Next support is seen at this week’s low of $14.755 and then at last week’s low of $14.625. Wyckoff's Market Rating: 4.0.

July N.Y. copper closed down 230 points at 268.00 cents today. Prices closed nearer the session low today. The copper bears still have the overall near-term technical advantage. However, a seven-week-old downtrend on the daily bar chart has been negated. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 280.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the June low of 259.95 cents. First resistance is seen at this week’s high of 271.25 cents and then at 273.00 cents. First support is seen at today’s low of 267.35 cents and then at Tuesday’s low of 264.35 cents. Wyckoff's Market Rating: 3.0.

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