Gold price firmer on modest safe-haven bid; FOMC conclusion awaited
(Kitco News) - Gold and silver prices are higher in early U.S. trading Wednesday morning, as heightened geopolitical concerns have prompted some safe-haven demand. The marketplace is also awaiting this afternoon's FOMC statement and press conference from Fed Chairman Powell. October gold was last up $11.70 at $1,672.60 and December silver was up $0.442 at $19.64.
Risk aversion remains elevated at mid-week following news that Russian President Putin will partially mobilize more Russian troops to fight in his war with Ukraine, including implying in a speech that he could use nuclear weapons if Russia's integrity is threatened. One analyst said the longer the war drags on and with Russia making little if any further progress, the more threatened Putin will become, which could prompt the dictator to take more drastic measures to ensure his own survival.
Gold is getting a modest safe-haven bid on the Putin speech news. In recent months gold had tended not to see much, if any, safe-haven demand on global concerns that have been present, but apparently not worrisome enough to significantly boost gold and silver prices. The precious metals traders apparently reckon Putin's threats area big deal.
Global stock markets were mixed overnight, with Asian shares mostly down and European shares mostly up. U.S. stock indexes are pointed to narrowly mixed openings when the New York day session begins.
|Hedge funds remain bearish on gold for fifth straight week|
The Federal Reserve's FOMC meeting that began Tuesday morning ends this afternoon with a statement and press conference from Fed Chairman Jerome Powell, including fresh "dot plots" on the U.S. economy. The FOMC is expected to raise the key U.S. Fed funds rate by 0.75% in the Fed's effort to tamp down problematic price inflation. The Bank of England also holds its monetary policy meeting Thursday and is also expected to raise interest rates.
The key outside markets today see Nymex crude oil prices higher and trading around $85.50 a barrel. The U.S. dollar index is higher and pushed to another 20-year high in early U.S. trading. The yield on the 10-year U.S. Treasury note is fetching 3.542%. The 2-year Treasury note yield is 3.961%.
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.
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 this week's low of $1,657.10 and then at the September low of $1,651.90. Wyckoff's Market Rating: 1.5
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 the overnight low of $19.23 and then at $19.00. Wyckoff's Market Rating: 2.5.