Make Kitco Your Homepage

Gold firmer, shrugs off unsurprising FOMC statement

Kitco News

Editor's Note: Get caught up in minutes with our speedy summary of today's must-read news stories and expert opinions that moved the precious metals and financial markets. Sign up here!

(Kitco News) - Gold prices are modestly up in afternoon U.S. trading Wednesday and showed little reaction to an as-expected slight reduction in the key U.S. interest rate—the Fed funds rate. Some stronger-than-expected U.S. economic data released earlier today did put slight pressure on the precious metals as they came off their overnight highs. December gold futures were last up $3.30 an ounce at 1,494.00. December Comex silver prices were last down $0.046 at $17.78 an ounce.

The Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning and ended Wednesday afternoon saw the Fed cut its key interest rate by 0.25%, to 1.50% to 1.75%. It was the third quarter-point rate cut this year. The vote was 8-2 in favor of the cut. The wording of the statement was deemed mostly neutral but maybe just a bit more hawkish than expected. However, markets showed no significant reactions to the news. Fed Chairman Powell’s press conference, set to occur soon (as of this writing) may provide more clues on the glide path the Fed will take on future monetary policy moves.

Earlier today the first estimate of third-quarter U.S. gross domestic product came in at up 1.9% versus the consensus forecast of up 1.6%, on an annual basis.

Also, the October U.S. ADP national employment report came out with a gain of 125,000 jobs. The report was expected to show a rise of 100,000 jobs in October. Gold and silver prices down-ticked these reports.

Both of these reports fall into the camp of the U.S. monetary policy hawks, who do not want to see interest rates drop any more.

In overnight news, the Euro zone issued its October economic sentiment indicator and it came in at the lowest level in 4.5 years.

The key “outside markets” find Nymex crude oil prices lower in afternoon U.S. action and trading around $54.50 a barrel. Meantime, the U.S. dollar index was slightly higher. 

Live 24 hours gold chart [Kitco Inc.]

Technically, December gold futures closed up $3.30 at $1,494.00 today. Prices closed near mid-range and are now back in the middle of a choppy trading range. The bulls still have the overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,525.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the October low of $1,465.00. First resistance is seen at $1,500.00 and then at this week’s high of $1,510.80. First support is seen at this week’s low of $1,485.60 and then at $1,478.00. Wyckoff's Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures closed up $0.041 at $17.78 today. Prices closed near mid-range today. The silver bulls still have the overall near-term technical advantage. A four-week-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 $18.35 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $17.18. First resistance is seen at $18.00 and then at this week’s high of $18.145. Next support is seen at this week’s low of $17.605 and then at last week’s low of $17.44. Wyckoff's Market Rating: 6.5.

December N.Y. copper closed down 185 points at 267.20 cents today. Prices closed nearer the session low today. The copper bulls have the slight overall near-term technical advantage as prices have been trending up for four weeks. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the September high of 270.65 cents. The next downside price objective for the bears is closing prices below solid technical support at 254.00 cents. First resistance is seen at 270.65 cents and then at 273.00 cents. First support is seen at 265.90 cents and then at 263.00 cents. Wyckoff's Market Rating: 5.5.

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.