Gold holding slight gains ahead of FOMC meeting conclusion

(Kitco News) - Gold and silver prices are mildly up near midday Wednesday, just ahead of the conclusion of the Federal Reserve's monetary-policy-setting meeting this afternoon. Some downbeat U.S. economic data and surprising news from the U.S. Treasury are working to support the precious metals markets this morning. December gold was last up $2.10 at $1,996.40. December silver was last up $0.043 at $22.985.

Focus at mid-week is still on central bank meetings of the Federal Reserve and the Bank of England. Most of the marketplace expects the FOMC at this meeting to pause in its interest-rate-increase cycle. Fed Chairman Jerome Powell's remarks at his press conference will be closely scrutinized. Most think the Fed will continue its “hawkish pause” rhetoric.

The Bank of England meets on its monetary policy Thursday. Friday comes the U.S. employment situation report for October.

Importantly, a significant feature in the marketplace Wednesday morning, just before the FOMC results, is a sizable dip in U.S. Treasury yields. This follows a lower-than-expected figure the U.S. Treasury announced for its quarterly refunding operations, at $112 billion. Also, this morning's U.S. ISM October manufacturing purchasing managers index (PMI) came in much weaker than expected, at 46.7 versus 49.0 in September and expectations for a figure of 49.2. A reading below 50.0 suggests contraction in the sector. Meantime, the ADP national employment report came in below market expectations. The PMI and ADP data suggest a slowing U.S. economy and fall into the camp of the U.S. monetary policy doves, who want the Fed to stop raising interest rates. Of course, a hawkish surprise from the FOMC and Fed chair Powell this afternoon could trump the forementioned data—but that's not likely.

The key outside markets today see the U.S. dollar index slightly higher but down from overnight levels following the weaker U.S. data. Nymex crude oil prices are up and trading around $82.50 a barrel. The yield on the benchmark U.S. Treasury 10-year note is presently fetching around 4.8%.

Technically, December gold futures bulls have the overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $2,050.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,950.00. First resistance is seen at last week's high of $2,019.70 and then at the July high of $2,028.60. First support is seen at today's low of $1,983.70 and then at $1,973.60. Wyckoff's Market Rating: 6.0.

December silver futures bulls have the slight overall near-term technical advantage. However, a four-week-old price uptrend on the daily bar chart has been negated. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.05. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at $23.50 and then at this week's high of $23.75. Next support is seen at last week's low of $22.565 and then at $22.25. Wyckoff's Market Rating: 5.5.

December N.Y. copper closed up 235 points at 367.25 cents today. Prices closed nearer the session high today and closed at a four-week-high close. The copper bears still have the overall near-term technical advantage. However, a choppy, three-month-old downtrend on the daily bar chart has been negated. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 378.60 cents. The next downside price objective for the bears is closing prices below solid technical support at 350.00 cents. First resistance is seen at this week's high of 371.00 cents and then at 375.00 cents. First support is seen at this week's low of 363.15 cents and then at 360.00 cents. Wyckoff's Market Rating: 3.0.

By

Jim Wyckoff

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