(Kitco News) - Gold prices are up a bit in early U.S. trading Wednesday, just ahead of the conclusion of the U.S. central bank monetary policy meeting. There is still some safe-haven demand evident after the weekend terrorist strike in Jordan that killed three U.S. soldiers. President Biden said Tuesday he has decided on a plan for retaliation, which he said will be strong and in stages. April gold was last up $5.30 at $2,056.20. March silver was last up $0.001 at $23.225.
The U.S. economic data point of the week is the Open Market Committee meeting of the Federal Reserve that began Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. The FOMC is not expected to change U.S. monetary policy at this meeting but will likely give fresh guidance on futures policy plans. Many market watchers believe that the Fed won’t cut interest rates until at least June.
If the central bankers of the world are really the “smart money” in the global marketplace, gold must be an asset for investors to own. The World Gold Council reports global central banks continued to snatch up gold in 2023 and will continue to do so in 2024. Central banks’ collective purchases in 2023 were 1,037 tons, the WGC said. China’s central bank was the biggest buyer.
Asian stock markets were mixed in overnight trading. U.S. stock index futures are set to open lower when the New York day session begins. Risk aversion remains elevated at mid-week after the Iran-backed Houthi drone strike against U.S. troops in Jordan.
In overnight news, China’s business activity picked up in January, led by the services sector with manufacturing remaining in contraction. The official purchasing managers index (PMI) data showed the manufacturing PMI at 49.2 in January versus 49.0 December and 49.3 forecast. The services PMI was 50.7 in January compared to 50.4 December and 50.6 forecast. The January composite PMI was 50.9 versus 50.3 December. A reading above 50.0 suggests expansion, while a reading below 50.0 signals contraction.
The key outside markets today see the U.S. dollar index a bit firmer. Nymex crude oil prices are weaker and trading around $77.00 a barrel. Meantime, the yield on the benchmark U.S. Treasury 10-year note is presently fetching 4.032%.
Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP national employment report, the employment cost index, the Chicago ISM business survey, and the weekly DOE liquid energy stocks report.
Technically, the gold futures bulls have the slight overall near-term technical advantage but have faded. Prices are in a seven-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $2,100.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. First resistance is seen at this week’s high $2,068.00 and then at $2,075.00. First support is seen at Tuesday’s low of $2,047.10 and then at this week’s low of $2,037.70. Wyckoff's Market Rating: 5.5.
The silver bears have the overall near-term technical advantage. Prices are in a seven-week-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing March futures prices above solid technical resistance at $24.00. The next downside price objective for the bears is closing prices below solid support at the October low of $21.17. First resistance is seen at this week’s high of $23.43 and then at $23.72. Next support is seen at $23.00 and then at $22.765. Wyckoff's Market Rating: 3.5.
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