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Gold sees more price weakness after hawkish but as expected FOMC statement

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(Kitco News) - Gold futures futures prices are sharply lower and modestly extended those losses in early-afternoon U.S. trading Wednesday, in the immediate aftermath of the U.S. data point of the week: The FOMC meeting. February gold futures were last down $5.30 at $1,847.10 and March Comex silver was last up $0.079 at $23.975 an ounce.

The just-concluded Federal Reserve Open Market Committee (FOMC) meeting’s statement said it left interest rates unchanged but suggested inflationary pressures will warrant future rate hikes this year. The monthly bond-buying program will wind down in early March. The statement said the U.S. economy is improving but the pandemic is weighing on activity. The statement said inflation levels remain elevated. The statement was hawkish, but maybe not as hawkish as some market watchers expected. The gold market sold off a bit more after the FOMC statement, while U.S. Treasury yields rose.

Now, as of this writing, traders were now awaiting a press conference from Fed Chairman Jerome Powell. It’s expected he will lay the groundwork to raise U.S. interest rates at its March FOMC meeting. Many market watchers believe the Fed will do up to five U.S. interest rate increases this year. As evidenced by the recent stock market volatility, the marketplace appears to be getting more anxious regarding how the Fed in the coming months is going to deal with rising and even problematic price inflation.


Gold price in CAD trims daily losses as Bank of Canada holds off hiking rates

U.S. stock indexes are solidly higher in early-afternoon trading. The major U.S. indexes hit seven-month lows on Monday. Serious near-term technical damage has been inflicted upon the U.S. stock indexes, to suggest they have at put in near-term market tops.

Still on the front-burner of the marketplace is Russia poised to invade Ukraine. NATO allies are responding by sending arms to Ukraine and putting NATO troops on higher alert, including 8,500 U.S. troops. It appears that Russian President Putin has painted himself into a corner on this matter, which means the ending is unlikely to be diplomatic. President Biden knows this, and one has to wonder if Biden will craft a plan to get Putin to stand down his army while at the same time having him save face.

The key outside markets today see NYMEX crude oil prices solidly higher, at a contract high, and trading around $87.50 a barrel. The U.S. dollar index is a bit higher today. The U.S. Treasury 10-year note yield is presently fetching 1.805%.

Live 24 hours gold chart [Kitco Inc.]

Technically, February gold futures prices hit a two-month high Tuesday. Bulls still have the overall near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at the November high of $1,881.90. 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 $1,850.20 and then at this week’s high of $1,854.20. First support is seen at $1,825.00 and then at $1,820.00. Wyckoff's Market Rating: 6.5

Live 24 hours silver chart [ Kitco Inc. ]

March silver futures bulls have the overall near-term technical advantage. A six-week-old uptrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at Tuesday’s high of $24.045 and the at this week’s high of $24.36. Next support is seen at this week’s low of $23.595 and then at $23.25. Wyckoff's Market Rating: 6.0.

March N.Y. copper closed up 575 points at 450.80 cents today. Prices closed nearer the session high today. The copper bulls have the overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart, but just barely. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the January high of 460.10 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 431.35 cents. First resistance is seen at this week’s high of 453.80 cents and then at 457.50 cents. First support is seen at today’s low of 444.50 cents and then at last week’s low of 437.60 cents. Wyckoff's Market Rating: 6.5.

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.