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Gold prices pull back as risk aversion wanes, Federal Reserve divided

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(Kitco News) - Gold prices are moderately lower in early U.S. trading Thursday. Risk aversion in the world marketplace has subsided late this week, meaning less safe-haven demand for gold and silver. The U.S. Federal Reserve is also being deemed as less dovish on monetary policy following Wednesday’s FOMC meeting. December gold futures were last down $5.60 an ounce at 1,510.10. December Comex silver prices were last steady at $17.92 an ounce.

Asian and European stock markets were mostly up in trading overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. The marketplace is presently not as anxious as earlier this week, in the wake of the weekend terrorist attack on Saudi oil installations. It may be the case that President Trump will just apply stronger economic sanctions on Iran and not use a military option to respond to Iran’s attack on Saudi Arabia.

Traders and investors are still digesting the Federal Reserve’s Open Market Committee (FOMC) meeting that ended Wednesday afternoon and raised U.S. interest rates (the “Fed funds” rate) by 0.25%, to 1.75% to 2%. The move was expected by the marketplace. However, the FOMC members were split on the move, voting 7 to 3 in favor of the cut. Seven of 17 FOMC members expect just one more interest rate cut this year. The marketplace deemed the FOMC statement as not so easy on U.S. monetary policy as many had expected, despite the rate cut. “A divided Fed” is the term many are now using to describe the U.S. central bank’s monetary posture.

Overnight the Bank of Japan and held its monetary policy steady, while the Swiss National Bank did the same. The Bank of England is also meeting and its results are due out this morning.

The Paris-based OECD think tank has forecast global economic growth in 2019 at 2.9%, which is the slowest pace in 10 years. The OECD cited the U.S.-China trade war and Brexit fears as culprits for the slowing world economic growth pace.

Nymex crude oil prices are higher and trading around $59.25 a barrel. Reports this week said the damaged Saudi oil installations would be back on line by the end of this month, which is much sooner than initially expected.

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

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, existing home sales, and leading economic indicators.

Live 24 hours gold chart [Kitco Inc.]

Technically, the gold bulls have the solid overall near-term technical advantage but a three-month-old uptrend on the daily bar chart is again in jeopardy. 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 Wednesday’s low of $1,490.70. 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 $17.58 and then at the September low of $17.47. Wyckoff's Market Rating: 6.5.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.