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Gold prices weaker, shows little reaction to FOMC minutes

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(Kitco News) - Gold prices are modestly down in early-afternoon U.S. trading Wednesday, following the U.S. data point of the week that was just released—the FOMC minutes. Gold and silver markets showed no reaction to the report. December gold futures were last down $2.80 an ounce at 1,471.60. December Comex silver prices were last down $0.023 at $17.095 an ounce.

Wednesday afternoon’s minutes from the last meeting of the Federal Reserve’s Open Market Committee (FOMC) showed that members believe current U.S. monetary policy is well calibrated and the U.S. economic outlook is generally positive following last month’s 0.25% interest rate cut. However, the FOMC minutes said members are still concerned about slowing global economic growth negatively impacting the U.S. economy. U.S.-China trade tensions have eased, the FOMC believed at the time. However, developments in recent days on that matter may now contradict those notions. FOMC members again mentioned very low global inflation rates that could pose risks to the world economies. Markets reacted very little to today’s FOMC minutes.

Asian and European stock markets were weaker overnight. There is an uptick in risk aversion at mid-week following comments from President Trump Tuesday and today, when he said the U.S. could slap more trade tariffs on China and that China “needs” a deal to be completed. The U.S. Congress is also working on passing a resolution in support of Hong Kong’s protesters. And there are ongoing reports coming out of China that no trade deal would be agreed upon by China unless the U.S. lifts all of its tariffs on China’s imports into the U.S. Trump could impose more tariffs on Chinese goods as soon as December 15. Trumps comments today on China needing a trade deal did bring the gold market off its daily lows.

In other news Wednesday, China’s central bank again eased its monetary policy just a bit by lowering its one-year-loan prime rate to 4.15% from 4.2%. The five-year-loan rate was lowered from 4.85% to 4.80%. That’s the second lowering of interest rates this week by the People’s Bank of China.

There was another dour inflation report coming out of the Euro zone Wednesday. The German producer price index for October fell 0.6%, year-on-year, suggesting very low inflation remains a serious problem for the Euro zone.

The key “outside markets” today see the U.S. dollar index higher. Nymex crude oil prices are slightly up and trading around $55.35 a barrel.

Live 24 hours gold chart [Kitco Inc.]

Technically, December gold futures bears still have the slight overall near-term technical advantage as prices have been trending lower for 2.5 months. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,500.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,425.00. First resistance is seen at $1,480.00 and then at $1,490.00. First support is seen at Tuesday’s low of $1,465.10 and then at Monday’s low of $1,456.60. Wyckoff's Market Rating: 4.5

Live 24 hours silver chart [ Kitco Inc. ]

December silver futures bears still have the overall near-term technical advantage. Prices have been trending lower for 2.5 months. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $17.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $16.50. First resistance is seen at $17.25 and then at $17.50. Next support is seen at Tuesday’s low of $16.935 and then at the November low of $16.615. Wyckoff's Market Rating: 4.0.

December N.Y. copper closed down 100 points at 264.65 cents today. Prices closed near the session low today. The copper bulls and bears are on a level overall near-term technical playing field. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the November high of 273.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 255.00 cents. First resistance is seen at today’s high of 266.60 cents and then at 269.00 cents. First support is seen at 263.00 cents and then at last week’s low of 261.30 cents. Wyckoff's Market Rating: 5.0.

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.