(Kitco News) - Gold and silver prices are sharply lower and near their daily lows in midday U.S. trading Tuesday. Gold hit a three-week low and silver a four-week low. The precious metals are feeling the pressure of a likely even more hawkish major central bank meeting that got under way this morning. June gold was last down $49.50 at $2,308.60. July silver was last down $0.945 at $26.71.
The U.S. Federal Reserve’s Open Market Committee meeting began this morning and ends Wednesday afternoon with a statement and press conference from Fed Chair Jerome Powell. While no changes in monetary policy are expected, the FOMC statement and Powell’s presser will be very closely scrutinized by the marketplace. Recent warmer U.S. inflation data has prompted traders and analysts to dial back their timelines on interest rate cuts from the Fed, if they come at all this year.
A headline in the Wall Street Journal today reads: “Fed to signal it has stomach to keep rates higher for longer.” The story was written by reporter Nick Timiraos, who many believe has the inside track on getting top Fed officials to talk with him. He writes: “Firmer-than-anticipated inflation in the first three months of the year has likely postponed rate cuts for the foreseeable future.” Timiraos added the Fed will hold interest rates a level that will “provide meaningful restraint” to U.S. economic activity for longer than the Fed previously anticipated.
CNBC’s Steve Liesman today said there is now in the marketplace 22% odds for a rate hike coming before any rate cuts.
On Friday morning comes the U.S. jobs report from the Labor Department.
The key outside markets today see the U.S. dollar index solidly up. Nymex crude oil prices are down and trading around $81.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is fetching 4.657%. All three of these markets were in bearish daily postures for the precious metals markets today.
Technically, June gold futures prices hit a three-week low today. The bulls have the overall near-term technical advantage but they are fading. A 2.5-month-old uptrend on the daily bar chart was negated today. A minor bear flag pattern has formed on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,400.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,200.00. First resistance is seen at $2,325.00 and then at $2,350.00. First support is seen at $2,300.00 and then at $2,280.00. Wyckoff's Market Rating: 7.0.
July silver futures prices hit a four-week low today. The silver bulls have the overall near-term technical advantage but are fading. A two-month-old price uptrend on the daily bar chart has been negated and a downtrend line is now in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at $28.00. The next downside price objective for the bears is closing prices below solid support at $25.00. First resistance is seen at $27.00 and then at $27.50. Next support is seen at $26.50 and then at $26.25. Wyckoff's Market Rating: 6.0.
July N.Y. copper closed down 1,095 points at 456.70 cents today. Prices closed nearer the session low today and scored a big and bearish “outside day” down after hitting a two-year high early on. The copper bulls have the solid overall near-term technical advantage. Prices are in a 2.5-month-old uptrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 475.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 430.00 cents. First resistance is seen at 465.00 cents and then at today’s high of 469.45 cents. First support is seen at 450.00 cents and then at 445.00 cents. Wyckoff's Market Rating: 7.5
