Gold price weaker as risk aversion recedes ahead of FOMC
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(Kitco News) - Gold prices are lower and silver near steady in early U.S. trading Tuesday. Some mild profit-taking pressure from the shorter-term futures traders is featured as trader and investor risk appetite has up-ticked just a bit so far today. April gold was last down $12.00 at $1,970.40 and May silver was down $0.026 at $22.62.
Focus is now on the Federal Reserve’s FOMC meeting that begins Tuesday morning and concludes Wednesday afternoon. There is still some debate in the marketplace regarding whether the Fed will raise its main interest rate by 25 basis points or stand pat amid the U.S. and European banking crisis. Most market watchers are leaning toward a 0.25% Fed funds rate increase. The 0.5% rate hike by the European Central Bank last week makes a 0.25% increase by the FOMC more likely.
Global stock markets were mixed to higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Risk appetite is a bit better so far Tuesday as the U.S. and European banking turmoil continues to play out. Reports say JP Morgan bank chief Jamie Dimon is helping the troubled First Republic Bank through its crisis of investor/depositor confidence.
|Once $2,000 breaks, gold is off to the races - Willem Middelkoop|
The key outside markets today see the U.S. dollar index lower. Nymex crude oil futures prices are firmer and are trading around $68.25 a barrel, after hitting a 15-month low Monday. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.541%--up from levels seen Monday, which is an indication of less anxiety in the marketplace Tuesday. Gold prices are also weaker Tuesday, amid less safe-haven demand so far today.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail sales reports, and existing home sales.
Technically, the gold futures bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at all-time high of $2,078.80. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at the overnight high of $1,988.70 and then at $2,000.00. First support is seen at the overnight low of $1,966.60 and then at $1,950.00. Wyckoff's Market Rating: 8.0
The silver bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing May futures prices above solid technical resistance at $23.50. The next downside price objective for the bears is closing prices below solid support at $21.00. First resistance is seen at this week’s high of $22.855 and then at $23.00. Next support is seen at this week’s low of $22.35 and then at $22.00. Wyckoff's Market Rating: 6.5.