(Kitco News) - Gold and silver prices are sharply higher in early U.S. trading Thursday, with gold setting a record high of $2,225.30, basis April Comex futures. Silver prices hit a 3.5-month high overnight. A dovish bent by the U.S. Federal Reserve has boosted the precious metals markets late this week. April gold was last up $48.70 at $2,209.60. May silver was last up $0.515 at $25.615.
The marketplace is still buzzing about the Federal Open Market Committee (FOMC) monetary policy meeting that ended Wednesday afternoon and saw the Federal Reserve keep its monetary policy unchanged, as expected. The FOMC and Fed Chairman Powell leaned a bit dovish. The FOMC statement said the U.S. economy is growing and inflation has eased but is still elevated. The statement said no rate cuts will occur until the Fed has more confidence inflation has been tamed. Still, the statement said the Fed sees three interest rate cuts this year, which is what the marketplace focused more on. The Fed appears willing to tolerate slightly higher inflation for longer and still cut rates.
The U.S. dollar index weakened on the FOMC/Powell statements. U.S. Treasury yields dipped a bit. However, gold prices soared to record highs, with April Comex gold hitting a record high of $2,225.30 an ounce. The much stronger move in gold is puzzling to many long-time gold watchers, given the more modest price moves in the U.S. dollar index and U.S. Treasuries. It makes one wonder if a big player, like a bank, put on a huge long-side trade in gold futures in the afternoon after-hours market, when volume may have been thinner.
The Bank of England holds its regular monetary policy meeting Thursday.
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward higher openings and at or near record highs when the New York day session begins.
The key outside markets today see the U.S. dollar index modestly higher. The USDX has seen a solid rebound from the March low and the bulls still have the slight technical advantage. Nymex crude oil prices weaker and trading around $80.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching around 4.23%.
U.S. economic reports due out Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, the U.S. flash services and manufacturing purchasing managers indexes, existing home sales and leading economic indicators. U.S. Treasury Secretary Yellen also testifies to a Senate finance committee today.
Technically, the gold futures bulls have the solid overall near-term technical advantage. Prices have now seen a bullish upside breakout from the pennant pattern on the daily bar chart, which I pointed out to you last week. A steep four-week-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close in April futures above solid resistance at $2,300.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week’s low of $2,149.20. First resistance is seen at the contract and record high of $2,225.30 and then at $2,235.00. First support is seen at $2,200.00 and then at the overnight low of the overnight low of $2,190.00. Wyckoff's Market Rating: 9.0.
The silver bulls have the solid overall near-term technical advantage. Prices hit a 3.5-month high overnight. Silver bulls' next upside price objective is closing May futures prices above solid technical resistance at the December high of $26.575. The next downside price objective for the bears is closing prices below solid support at $24.00. First resistance is seen at $26.00 and then at $26.575. Next support is seen at $26.00 and then at this week’s low of $24.92. Wyckoff's Market Rating: 7.5.
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