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Gold price a bit weaker as FOMC meeting looms

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(Kitco News) - Gold and silver prices are slightly lower in early U.S. trading Tuesday. An aggressively hawkish monetary policy from the U.S. Federal Reserve has cast a pall over the stock and financial markets, but has boosted U.S. Treasury yields and the U.S. dollar index—both of which are competing assets with the safe-haven metals. October gold was last down $2.60 at $1,665.00 and December silver was down $0.083 at $19.275.

Risk aversion remains elevated among traders and investors early this week. Marketplace focus is on the Federal Reserve’s FOMC meeting that begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The FOMC is expected to remain aggressively hawkish and raise the key U.S. Fed funds rate by 0.75% in the Fed’s effort to tamp down problematic price inflation. Sweden’s central bank today raised its key interest rate by a full 1.0%. The Bank of England also holds its monetary policy meeting Thursday and is also expected to raise interest rates.

Global stock markets were mixed overnight, with European shares mostly lower and Asian shares mostly higher. U.S. stock indexes are pointed to lower openings when the New York day session begins.


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The key outside markets today see Nymex crude oil prices slightly up and trading around $84.00 a barrel. The U.S. dollar index is slightly firmer in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 3.535%. The 2-year U.S. Treasury note yield climbed to 3.979%.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail sales indexes, and new residential construction.

Live 24 hours gold chart [Kitco Inc.]

Technically, the October gold futures bears have the solid overall near-term technical advantage. Prices are in a downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,600.00. First resistance is seen at this week’s high of $1,678.00 and then at $1,686.30. First support is seen at last week’s low of $1,651.90 and then at $1,650.00. Wyckoff's Market Rating: 1.0

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $20.00. The next downside price objective for the bears is closing prices below solid support at $18.00. First resistance is seen at this week’s high of $19.69 and then at $20.00. Next support is seen at $19.00 and then at $18.77. Wyckoff's Market Rating: 2.5.

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.