Price pressure on gold, silver ahead of FOMC conclusion
(Kitco News) - Gold and silver prices are moderately lower in early U.S. trading Wednesday, and are being pressured by bearish outside markets that include a firmer U.S. dollar index and weaker crude oil prices. Rising U.S. Treasury bond yields at mid-week are also a negative for the gold and silver markets. April gold futures were last down $4.30 at $1,726.60 and May Comex silver was last down $0.098 at $25.91 an ounce.
Traders at mid-week are squarely focused on the Federal Reserve's two-day Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement and new U.S. economic projections, as well as a press conference from Fed Chairman Jerome Powell. While no change in U.S. monetary policy is expected at this week's meeting, traders will be closely scrutinizing the Fed's wording and Powell's comments regarding U.S. and global economic growth and inflation prospects.
Global stock markets were mixed but mostly lower overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. U.S. Treasury bond yields are on the rise again and that is giving stock markets pause. The U.S. Treasury 10-year Treasury note is presently yielding 1.66%--the highest level in over a year.
An inflation reading coming out of the Euro Zone today continues to show very tame prices. The February consumer price index came in up 0.2% from January and up 0.9%, year-on-year. Those numbers were in line with market expectations.
The key "outside markets" today see Nymex crude oil futures prices lower and trading around $64.20 a barrel. Meantime, the U.S. dollar index is a bit firmer early today.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, new residential construction and the weekly DOE liquid energy stocks report.
Technically, the April gold futures bears have the firm overall near-term technical advantage amid a nine-week-old price downtrend in place on the daily chart. Bulls' next upside price objective is to produce a close in April futures above solid resistance at $1,750.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the March low of $1,673.30. First resistance is seen at this week's high of $1,740.50 and then at $1,750.00. First support is seen at this week's low of $1,719.20 and then at $1,700.00. Wyckoff's Market Rating: 3.0
May silver futures bears have the slight overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.50 an ounce. The next downside price objective for the bears is closing prices below solid support at the March low of $24.845. First resistance is seen at the overnight high of $26.14 and then at this week's high of $26.405. Next support is seen at the overnight low of $25.805 and then at $25.425. Wyckoff's Market Rating: 4.5.