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Gold, silver prices weaker; Fed decision looms

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(Kitco News) - Gold and silver prices are lower in early U.S. trading Wednesday. Safe-haven demand for the metals has waned a bit at mid-week as risk aversion has subsided just a bit. Traders and investors are now focused on today’s FOMC decision. December gold futures were last down $4.10 an ounce at 1,509.30. December Comex silver prices were last down $0.215 at $17.925 an ounce.

The big U.S. economic event this week is the meeting of the Federal Reserve’s Open Market Committee (FOMC) that began Tuesday morning and ends Wednesday afternoon with a statement. It’s widely believed the FOMC will lower U.S. interest rates by 0.25% today. Traders also hope they will get some forward guidance on U.S. monetary policy from Fed Chairman Powell’s press conference today. President Trump has been berating the Fed to more aggressively lower interest rates to make the U.S. more competitive with other nations on trade.

Asian and European stock markets were mixed in quieter trading overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. At mid-week the marketplace is not as anxious as earlier this week, in the wake of the weekend terrorist attack on Saudi oil installations. Still, traders and investors are wondering when “the next shoe will drop” on this matter.

After a spike up in very short term lending rates on Tuesday, the overnight rates returned to normal levels Wednesday, after the Federal Reserve injected liquidity into the financial system. While some traders and institutions were rattled by the matter, the overall marketplace was not impacted.

Nymex crude oil prices are weaker and trading around $59.00 a barrel. Reports surfaced Tuesday that the damaged Saudi oil installations could be back on line sooner than expected.

The other key outside market today sees the U.S. dollar index trading up.

In overnight news, the Euro zone August consumer price index was reported up 0.1% from July and up 1.0%, year-on-year.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction and the weekly DOE liquid energy stocks report.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the solid overall near-term technical advantage and are keeping alive a three-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at the September high of $1,566.20. Bears' next near-term downside price breakout objective is pushing December futures prices below solid technical support at $1,485.00. First resistance is seen at this week’s high of $1,519.70 and then at 1,525.00. First support is seen at $1,500.00 and then at the September low of $1,492.10. Wyckoff's Market Rating: 7.0

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bulls still have the overall near-term technical advantage. A three-month-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 last week’s high of $18.555 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.00. First resistance is seen at this week’s high of $18.17 and then at $18.265. Next support is seen at this week’s low of $17.69 and then at last week’s low of $17.47. Wyckoff's Market Rating: 6.5.

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