Gold price near steady as FOMC decision looms

Welcome to Kitco News' 2023 Outlook Series. Uncertainty continues to dominate financial markets as central bank monetary policies push the global economy into a recession to cool down inflation. Stay tuned to Kitco News to learn from the experts on how to navigate turbulent financial markets in 2023.

(Kitco News) - Gold prices are slightly up in early U.S. trading Wednesday. Silver prices are slightly down. Most markets are pausing ahead of the conclusion of the FOMC meeting this afternoon. Look for more active trading in many markets following the 2:00 p.m. EST FOMC statement. April gold was last up $3.10 at $1,948.60 and March silver was down $0.096 at $23.75.

The just-released ADP national employment report for January showed a rise of 106,000 workers, which was below the consensus forecast for a rise of 190,000. Gold prices up-ticked just very slightly following the report.

The U.S. data point of the week is the Federal Reserve Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement. Most believe the Fed will raise the key U.S. interest rate by 0.25%, following the recent 0.5% rate hikes. As always, the Wednesday afternoon press conference by Fed Chairman Jerome Powell will be closely monitored. The European Central Bank and Bank of England hold their monetary policy meetings Thursday.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. The U.S. stock indexes are still in price uptrends on the daily bar charts and the stock index bulls have the overall near-term technical advantage. However, a Barron's story on recent upbeat U.S. economic data and the U.S. stock market rally early this year has a headline: "Markets are pricing a fairy-tale ending; the dream can't come true."

In overnight news, the Euro zone reported just a bit tamer consumer inflation in January, as its consumer price index came in at up 8.5%, year-on-year, compared to a rise of 9.2% in December.

An OPEC-plus meeting today is expected to see the oil cartel keep its collective crude oil production unchanged.

The key outside markets today see the U.S. dollar index lower and hovering near its recent nine-month low. Nymex crude oil futures prices are up a bit and trading around $79.00 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching around 3.486%.   

It's a very busy day for U.S. economic data released Wednesday, including the weekly MBA mortgage applications survey, the ADP national employment report, the U.S. manufacturing purchasing managers' index (PMI), the ISM report on business manufacturing, the global manufacturing PMI, construction spending, domestic auto industry sales, the FOMC meeting concludes, and the weekly DOE liquid energy stocks report.

Technically, the gold futures bulls still have the firm overall near-term technical advantage. However, a three-month-old uptrend on the daily bar chart has stalled out. Bulls' next upside price objective is to produce a close in April futures above solid resistance at the January high of $1,966.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at this week's high of $1,950.10 and then at $1,966.50. First support is seen at the overnight low of $1,938.60 and then at $1,925.00. Wyckoff's Market Rating: 7.5

The silver bulls have the overall near-term technical advantage. However, trading has been sideways and choppy for weeks. Silver bulls' next upside price objective is closing March futures prices above solid technical resistance at the January high of $24.775. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at today's high of $23.84 and then at $24.00. Next support is seen at the overnight low of $23.49 and then at this week's low of $23.05. Wyckoff's Market Rating: 6.5.