Gold prices steady, back off a bit following FOMC statement
(Kitco News) - Gold prices are near unchanged in early-afternoon dealings Wednesday, and backed off just a bit following an as-expected FOMC statement. Silver prices remain higher and notched a five-week high today. Precious metals bulls at mid-week are focusing on the prospects of more liquidity in the global marketplace sparking better consumer demand for metals, including the specter of problematic price inflation from all the monetary stimulus. February gold futures were last down $0.50 at $1,854.10 and March Comex silver was last up $0.341 at $24.985 an ounce.
The economic data point of the day and arguably of the week was today’s conclusion of the U.S. Federal Reserve’s Open Market Committee (FOMC) meeting. The Fed left U.S. interest rates unchanged, as expected. The FOMC statement also said there will likely be no change in U.S. interest rates until at least 2023. Markets saw little reaction to the FOMC statement. Traders as of this writing were awaiting the press conference from Fed Chairman Jerome Powell, including the Fed’s economic projections. The marketplace will parse Powell’s remarks for other clues on U.S. monetary policy direction in 2021.
Global stock markets were mostly higher overnight. U.S. stock indexes are mixed in early afternoon trading and near the recent record highs. The U.S. and other countries have rolled out Covid-19 vaccines in rapid fashion as there appears to be light at the end of the dark pandemic tunnel. The U.K. and the European Union appear to be getting closer to a smooth Brexit deal, and U.S. congressional Democrats and Republicans may be inching closer to a new financial stimulus package for Americans. Both parties have agreed some members won’t leave Washington, D.C., for the holidays until a deal is done.
The U.S. dollar index is lower early today and hit another 2.5-year low overnight. The other important outside market sees January Nymex crude oil futures prices slightly higher and trading around $47.75 a barrel. These two outside markets are in a bullish daily posture for the metals markets. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading around 0.92%.
Technically, February gold futures bulls and bears are on a level overall near-term technical playing field and the bulls have some momentum. Bulls’ next upside price objective is to produce a close in December futures above solid resistance at the December high of $1,879.80, which would then restart a price uptrend on the daily chart. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at today’s high of $1,869.50 and then at the December high of $1,879.80. First support is seen at $1,850.00 and then at $1,828.50. Wyckoff's Market Rating: 5.0
March silver futures bulls have regained the overall near-term technical advantage and have restarted a price uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at the November high of $26.27 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.63. First resistance is seen at today’s high of $25.49 and then at $26.00. Next support is seen at today’s low of $24.575 and then at $24.00. Wyckoff's Market Rating: 6.0.
March N.Y. copper closed up 125 points at 355.70 cents today. Prices closed near mid-range today. Prices hit a 7.5-year high last week. The copper bulls have the strong overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 375.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 340.00 cents. First resistance is seen at today’s high of 358.00 cents and then at 360.00 cents. First support is seen at this week’s low of 350.00 cents and then at 345.00 cents. Wyckoff's Market Rating: 8.5.