Gold, silver pull back on profit taking; no reaction to FOMC statement
(Kitco News) - Gold and silver prices are moderately lower in midday U.S. trading Wednesday but up from daily lows, as some profit taking from the shorter-term futures traders was featured after recent gains. Some normal backing and filling on the charts has also occurred this week. June gold futures were last down $4.10 at $1,774.70 and July Comex silver was last down $0.34 at $26.11 an ounce.
The data point of the week came this afternoon as the Federal Reserve's two-day Open Market Committee (FOMC) meeting concluded with the Fed making no changes to U.S. monetary policy. No changes were expected. The FOMC statement said the U.S. economy continues to pull out of the pandemic, partly in response to the rapid pace of U.S. Covid vaccinations. The statement said inflation has crept up, but that is likely only due to "transitory" factors. The Fed said it will maintain its bond-buying program (quantitative easing) until more progress is make on the Fed's economic goals. Markets showed no major reaction to the FOMC statement. Traders and investors will now closely scrutinize Fed Chairman Jerome Powell's remarks at his press conference that was set to begin soon, as of this writing.
Also, President Biden later today is set to lay out to a joint session of Congress another big government spending program in order to continue to pry the U.S. economy away from the grip of the pandemic. Biden's $1.8 trillion "American Families Plan" includes $1 trillion in spending and $800 million in tax cuts and credits for middle- and lower-income American families. The 10-year plan would be part funded by increased taxes and wealthy Americans.
The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are higher, hit a five-week high, and trading around $64.00 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.64%. Bond yields are on the rise again at mid-week.
Technically, June gold futures bulls still have the overall near-term technical advantage as prices are in a four-week-old uptrend on the daily bar chart. However, the bulls need to show fresh power soon to keep the uptrend alive. Bulls' next upside price objective is to produce a close above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,723.20. First resistance is seen at this week's high of $1,785.90 and then at the April high of $1,898.40. First support is seen at today's low of $1,761.80 and then at $1,750.00. Wyckoff's Market Rating: 6.0
July silver futures bulls have the overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at this week's high of $26.56 and then at the April high of $26.765. Next support is seen at today's low of $25.875 and then at last week's low of $25.715. Wyckoff's Market Rating: 6.0.
July N.Y. copper closed up 65 points at 449.25 cents today. Prices closed near the session high today and closed at a contract and nearly 10-year high close. 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 460.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 420.00 cents. First resistance is seen at the contract high of 452.50 cents and then at 455.00 cents. First support is seen at today's low of 441.55 and then at 440.00 cents. Wyckoff's Market Rating: 9.5.