Make Kitco Your Homepage

Gold price modestly down ahead of FOMC meeting conclusion

Kitco News

Editor's Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today's must-read news and expert opinions. Sign up here!

(Kitco News) - Gold prices are a bit weaker in early U.S. trading Wednesday, while silver is slightly higher. There is some better risk appetite in the marketplace at mid-week and that’s a negative for the safe-haven metals. Trading will likely be more subdued ahead of this afternoon’s statement from the Federal Reserve’s Federal Open Market Committee and Fed Chairman Jerome Powell’s press conference. October gold futures were last down $4.60 at $1,771.50. December Comex silver was last up $0.059 at $22.67 an ounce.

The FOMC statement and press conference from Powell will be closely scrutinized, especially any wording on the timing of the Fed’s likely tapering its bond-buying program and also inflation prospects. Markets could see some increased volatility in the immediate aftermath of the FOMC statement and during Powell’s presser.

Global stock markets were mixed in overnight trading. The U.S. stock indexes are also pointed to gains when the New York day session begins. There is less risk aversion in the global marketplace at mid-week. The troubled Chinese property giant, Evergrande, is still on traders’ and investors’ minds, but many believe the situation will not turn into a worldwide contagion and that the Chinese government will not let Evergrande fail. The company said it would make its latest debt payments—at least one of them anyway. The marketplace will continue to keep a close eye on the matter. China’s markets reopened today after a public holiday, with the Chinese stock market a bit weaker but not showing any stress.

Just over the horizon, the U.S. government is now grappling with extending the U.S. debt ceiling. Treasury Secretary Janet Yellen said the government will run out of money sometime in October. The marketplace has seen this situation play out in years past, and it could inject some anxiety into the marketplace if the government actually nears a shutdown.

The key outside markets today see the U.S. dollar index near steady. Nymex crude oil futures prices are higher and trading around $71.70 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.34%.  

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, existing home sales and the weekly DOE liquid energy stocks report.

Live 24 hours gold chart [Kitco Inc.]

Technically, October gold futures bears have the overall near-term technical advantage. Prices are in a fledgling downtrend on the daily bar chart. 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 $1,700.00. First resistance is seen at this week’s high of $1,780.80 and then at $1,790.00. First support is seen at Tuesday’s low of $1,756.30 and then at $1,750.00. Wyckoff's Market Rating: 4.0

Live 24 hours silver chart [ Kitco Inc. ]

The silver bears have the solid overall near-term technical advantage. Silver bulls' next upside price objective is closing December futures prices above solid technical resistance at $23.50 an ounce. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at the overnight high of $22.89 and then at $23.00. Next support is seen at the overnight low of $22.455 and then at this week’s low of $22.025. Wyckoff's Market Rating: 1.5.

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.