(Kitco News) - Gold and silver prices are lower in midday U.S. trading Monday, with silver prices posting solid losses. Both metals are feeling the bearish effects of a recent strong rally in the U.S. dollar index and a rise in U.S. Treasury yields. Trading today and most of Wednesday will likely be more subdued ahead of the conclusion of the FOMC meeting of the Federal Reserve that began this morning. August gold was last down $2.70 at $2,324.30. July silver was last down $0.624 at $29.245.
The Federal Open Market Committee meeting ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell, including the latest “dot plots.” No changes in U.S. monetary policy are expected at this meeting, but as always the rhetoric coming from the Fed will be parsed by the marketplace.
On Wednesday comes a key U.S. inflation report—the consumer price index for May. Annual CPI is seen up 3.4%, which would be unchanged from the April annual CPI figure.
The Euro currency remains wobbly in the aftermath of weekend parliamentary elections in the European Union which showed right-wing politicians faring much better than expected. Reads a DowJones Newswire headline today: “Europe’s nationalist turn could stoke inflation, curb fiscal discipline.”
Asian and European stock indexes were mixed overnight. U.S. stock indexes are mixed to weaker at midday. The major U.S. indexes are not far below their recent record highs.
The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are up and trading around $78.25 a barrel. The benchmark 10-year U.S. Treasury note yield is presently at 4.445%.
Technically, August gold bulls and bears are on a level overall near-term technical playing field. A bearish double-top reversal pattern has formed on the daily bar chart to suggest a near-term market top is in place. Bulls’ next upside price objective is to produce a close above solid resistance at the June high of $2,406.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,300.00. First resistance is seen at today’s high of $2,337.30 and then at $2,350.00. First support is seen at the overnight low of $2,314.50 and then at last week’s low of $2,304.20. Wyckoff's Market Rating: 5.0.
July silver futures bulls have the overall near-term technical advantage but have faded. A price uptrend on the daily bar chart has been negated to suggest a near-term market top is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at the May high of $32.75. The next downside price objective for the bears is closing prices below solid support at $28.00. First resistance is seen at $30.00 and then at $30.50. Next support is seen at $29.00 and then at $28.50. Wyckoff's Market Rating: 6.0.
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