Gold sells off modestly on as-expected FOMC rate hike
(Kitco News) - Gold prices are a bit weaker and did hit a fresh nearly 2.5-year low in afternoon U.S. trading Wednesday. The yellow metal lost modest gains seen just before an as-expected U.S. interest rate increase was announced by the Federal Reserve. October gold was last down $3.10 at $1,658.10 and December silver was up $0.282 at $19.45.
The just-released Federal Reserve FOMC statement saw the U.S. central bank raise the key Fed funds rate by 0.75% for the third straight meeting, to a range of 3.0% to 3.25%, in the Fed's effort to tamp down problematic price inflation. The statement said the Fed sees the Fed funds rate at 4.6% at the end of 2023 and then declining slightly the following two years. The Fed is “highly attentive” to inflation risks, said the statement. The Fed also slightly lowered its forecast for U.S. GDP growth. The markets now await Fed Chairman Jerome Powell's press conference, set to begin shortly (as of this writing).
The Bank of England also holds its monetary policy meeting Thursday and is also expected to raise interest rates.
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 sees new safe haven allure as Putin threatens to use all instruments to defend its territory|
Global stock markets were mixed overnight, with Asian shares mostly down and European shares mostly up. U.S. stock indexes are firmer.
The key outside markets today see Nymex crude oil prices weaker and trading around $83.00 a barrel. The U.S. dollar index is solidly higher and pushed to another 20-year high today. The yield on the 10-year U.S. Treasury note is fetching 3.553%. The 2-year Treasury note yield is 3.99%.
Technically, October gold futures bears have the solid overall near-term technical advantage. 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 $1,650.00 and then at $1,635.00. Wyckoff's Market Rating: 1.0.
December silver futures bears have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $21.00. The next downside price objective for the bears is closing prices below solid support at $18.00. First resistance is seen at today's high of $19.77 and then at $20.00. Next support is seen at $19.00 and then at last week's low of $18.77. Wyckoff's Market Rating: 2.5.
December N.Y. copper closed down 425 points at 346.00 cents today. Prices closed near the session low today. The copper bears have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the August high of 378.35 cents. The next downside price objective for the bears is closing prices below solid technical support at the July low of 315.55 cents. First resistance is seen at this week's high of 355.80 cents and then at 360.00 cents. First support is seen at last week's low of the September low of 354.40 cents and then at 350.00 cents. Wyckoff's Market Rating: 3.0.