Gold, silver show little reaction to FOMC statement
(Kitco News) Gold and silver futures prices are lower in afternoon U.S. trading Wednesday, but well up from their earlier lows. The metals are pressured in part by a higher U.S. dollar index on this day. Shorter-term futures traders were also exerting chart-based pressure on gold and silver at mid-week, amid a lack of fresh, bullish news for the metals recently. February gold futures were last down $5.40 at $1,845.10 and March Comex silver was last down $0.153 at $25.38 an ounce.
The Federal Reserve’s just-concluded two-day Open Market Committee (FOMC) meeting began Tuesday morning and ended Wednesday afternoon with a statement that left U.S. monetary policy unchanged, as expected. The statement said U.S. economic growth has moderated in last few months and the pandemic still poses risks. The markets, including the precious metals, reacted little to the news. Fed Chairman Powell’s press conference, to begin shortly as of this writing, will be closely scrutinized. Powell does have a history of making unexpected remarks during his press conferences, which have rattled markets.
Global stock markets were flat to mixed overnight. U.S. stock indexes are solidly lower in afternoon trading. If the stock indexes continue to sell off this week, gold and silver could see some safe-haven demand surface. More and more market watchers are reckoning the U.S. stock market has become very frothy, what with an economy that is awash in easy money from the Federal Reserve.
Possibly flying just under the radar of the marketplace at present is talk among some traders and brokers that China is experiencing a serious food shortage. China has been making bigger purchases of U.S. grains lately, as part of a previous trade agreement between the two largest economies in the world. Also, there are some reports that Covid-19 is making a resurgence in some locations in China. All of the above could impact China’s economic growth prospects. Of course, the China government’s secretive nature makes anything of this nature hard to confirm, but it bears keeping a closer eye upon.
The key “outside markets” today see the U.S. dollar index solidly higher. Meantime, Nymex crude oil futures prices are firmer and trading around $53.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note stands at 1.04%.
Technically, February gold futures bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. Bulls’ next upside price objective is to produce a close above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the January low of $1,800.80. First resistance is seen at today’s high of $1,851.50 and then at Tuesday’s high of $1,860.80. First support is seen at today’s low of $1,828.40 and then at $1,817.10. Wyckoff's Market Rating: 5.0
March silver futures bulls and bears are back on a level overall near-term technical playing field. Silver bulls' next upside price objective is closing prices above solid technical resistance at the January high of $29.105 an ounce. The next downside price objective for the bears is closing prices below solid support at the January low of $24.04. First resistance is seen at today’s high of $25.545 and then at this week’s high of $25.835. Next support is seen at $25.00 and then at today’s low of $24.715. Wyckoff's Market Rating: 5.0.
March N.Y. copper closed down 600 points at 355.75 cents today. Prices closed nearer the session low today and hit a three-week low. The copper bulls have the firm overall near-term technical advantage but have faded a bit. A price uptrend on the daily bar chart has been negated recently. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the January high of 373.40 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 360.00 cents and then at today’s high of 362.80 cents. First support is seen at today’s low of 352.05 cents and then at 350.00 cents. Wyckoff's Market Rating: 7.0.